Contract Disputes and Breach of Contract

Contract disputes can arise in almost any business or personal transaction. When parties enter into a contract, each side is generally expected to fulfill the obligations agreed upon. When one party fails to perform as required, the other party may have a claim for breach of contract.

A breach of contract can occur when a party fails to perform an obligation, fails to perform on time, repudiates the agreement, or otherwise fails to comply with the terms of the contract. The available remedies depend on the contract, the nature of the breach, and the circumstances of the dispute.

Types of Contract Breaches

Contract disputes can involve different types of breaches, including:

Anticipatory Breach: An anticipatory breach, also known as anticipatory repudiation, occurs when a party clearly indicates before performance is due that they will not fulfill their contractual obligations. In certain circumstances, the non-breaching party may pursue available remedies without waiting for the performance date. For contracts involving the sale of goods, Virginia’s Uniform Commercial Code specifically addresses anticipatory repudiation and the remedies available to the aggrieved party.

Material Breach: A material breach is a substantial failure to perform an essential part of the agreement. Whether a breach is material can depend on the language of the contract, the parties’ reasonable expectations, the nature of the breach, and the harm caused by the breach.

Other Breaches: Not every breach is material. A party may fail to perform an obligation without the breach substantially depriving the other party of the benefit expected under the contract. The legal consequences of a breach depend on the particular agreement and applicable law.

Establishing a Breach of Contract Claim

Before pursuing a breach of contract claim, it is important to determine whether an enforceable contract exists and what obligations the parties agreed to undertake.

Depending on the circumstances, this may involve examining:

• Whether the parties reached an agreement
• The terms and language of the contract
• Whether the parties exchanged something of value, when required
• Whether the agreement complies with applicable law
• Whether each party performed the obligations required of them
• Whether one party failed to perform as required
• Whether the breach caused legally recoverable damages

Not every agreement must be in writing. However, Virginia law requires certain types of agreements to be in writing and signed to be enforceable, including certain agreements involving real estate, surety obligations, agreements that cannot be performed within one year, and certain promises to lend money or extend credit.

Proving Damages

A party pursuing a breach of contract claim generally must establish the breach and the damages resulting from it. The type and amount of damages that may be available depend on the contract, the applicable law, and the facts of the case.

A contract may also contain provisions addressing available remedies, limitations on damages, notice requirements, attorneys’ fees, dispute resolution, or other consequences of a breach. These provisions should be carefully reviewed before deciding how to proceed.

A breach of contract does not automatically result in an award of damages. The party bringing the claim must establish the legal basis for the requested relief and satisfy the applicable requirements for the particular claim.

Contract Dispute Litigation

When the parties cannot resolve a contract dispute, litigation may become necessary. A contract dispute may involve claims to enforce the agreement, recover damages, or obtain other relief available under the contract and applicable law.

Before filing a lawsuit, it is important to review the contract carefully and determine whether it contains requirements for providing notice, pursuing mediation or arbitration, or taking other steps before litigation. It is also important to preserve relevant documents and communications concerning the agreement and the alleged breach.

Statute of Limitations for Contract Claims in Virginia

The deadline for bringing a contract claim depends on the type of contract and the applicable law. Under Virginia law, an action based on a written contract that is signed by the party to be charged is generally subject to a five-year statute of limitations. Certain unwritten contracts and written contracts that are not signed by the party to be charged are generally subject to a three-year limitation period. Other types of contracts may be governed by different limitation periods.

For many contract claims, the limitation period begins when the breach occurs rather than when the resulting damages are discovered. Because the applicable deadline can vary depending on the circumstances, parties should seek legal advice promptly when a contract dispute arises.

How Raheen Law Group Can Help

At Raheen Law Group, we can assist clients with a wide range of contract disputes. Our attorneys can help with:

• Reviewing and interpreting contracts
• Evaluating potential breach of contract claims
• Enforcing the terms of an existing contract
• Pursuing damages and other available remedies
• Defending against allegations of breach of contract
• Negotiating the resolution of contract disputes
• Representing clients in contract litigation

Whether you are seeking to enforce a contract, pursuing legal action because of an alleged breach, or defending against a contract dispute, Raheen Law Group can help you understand your legal options.

If you need assistance with a contract dispute or an alleged breach of contract, contact Raheen Law Group for a consultation.