Breach of Contract Lawyer Toronto

Contract Law Overview

Contracts are fundamental to business operations as it is a legally binding agreement involving two or more parties. There are certain elements of contracts that have been defined throughout the common law. These are known as the essential elements that are generally present in most contracts. First, there must be an offer and acceptance of that offer. Both the offer and the acceptance must be clear, unambiguous, and communicated between the two or more parties involved. Second, there is an element known as consideration that must be exchanged between the parties. Consideration can be though of as something of value. This can be money, services, or goods, among other things of value, that can be exchanged from one party to another. Third, there must have been an intention to create the agreement and incur the contractual obligations that flow from it.

In addition to these three elements, the parties must also have the legal capacity to enter into a contract, as well as the contract must have a legal purpose. Legal capacity means that they are mentally capable of appreciating the terms of the contract, they were not under any duress or undue influence when agreeing to the contract, and are of legal age. When these elements are present, it is likely that a contract occurs.

Understanding Contract Breach

A breach of contract can have different implications on the remedies available to an individual depending on the specific circumstances of the breach. A breach occurs when one party fails to fulfill their promised obligations under the agreement. The injured party is the party that suffers the breach whereas the breaching party is the party that has committed the breach. The remedy from a breach of contract may be written within the terms of the contract in some cases, or it may be sought through other resolutions or the court.

Parties Involved in Contracts

For a contract to be formed, there must be a minimum of two parties. These parties are known as the offeror and the offeree.

The offeror is the party that proposes and submits the initial offer. The offeree then has the power to accept the offer, decline, or counter. If an offer is countered, the roles are presumed to be reversed and the offeree then becomes the offeror. When there is a breach of contract, there is an injured party and a breaching party.

Types of Contract Breach

Depending on the type of breach, there are different remedies available. A material breach is a breach that deprives the injured party of the very heart of the contract. This could be a failure to deliver assets entirely, or delivering an incorrect product. In essence, it deprives the injured party of obtaining the very purpose for which they agreed to the agreement in the first place.

A minor breach is one where a party is not deprived of the very heart of the contract, but a breach nonetheless, on a lesser level. Such as failing to deliver goods by a specific due date. However this can also constitute as a material breach depending on the circumstances. Some breaches are differentiated based on the circumstances.

These are actual breaches and anticipatory breaches. Actual breaches occur when one party fully refuses to perform the terms of the contract. Anticipatory breach is where one party provides notice in advance that they will not be abiding by certain terms of the contract.

Contract Lawsuit Process

There are essential elements that need to be proven in order to proceed in a contract lawsuit. There must be a valid contract in the first place. The Plaintiff, who is suing for breach of contract, must prove that some terms of the valid contract were breached by the defendant.

The Plaintiff must have provided some sort of notification to the defendant prior to proceeding with a lawsuit. Finally, the Plaintiff must be able to demonstrate that they did not breach the terms of the contract themselves.

The evidence that can be used to support the Plaintiff or Defendants claim other than the contract itself, is relevant communications between the parties, invoices, receipts, or other documentation that indicate a breach of contract, mitigate the damages, or provide cause for aggravated damages.

To begin a lawsuit proceeding, the Plaintiff drafts a statement of claim outlining the breach that was incurred and the relief sought. The Plaintiff then files this statement of claim with the appropriate court and serves the claim on the defendant.

The defendant is allowed to respond to this claim and the court will schedule a hearing for the matter. Negotiation can take place during this process and is encouraged. Both parties are required to adhere to procedural requirements and deadlines throughout the process.

The Role of a Contract Lawyer

When you retain a contract lawyer or specifically, a breach of contract lawyer, their role is multifaceted. Firstly, they have an obligation to their client to help ease the stresses that come with the litigation process. Secondly, they are competent to deal with matters of contract law allowing them to represent their clients’ best interests effectively and reasonably. Chand & Co deals with contract breaches and have extensive experience in litigation. The experience gained from other litigation cases and the best strategies to implement during the litigation process will be of great benefit to clients.

Resolving Contract Disputes

There are other methods to consider when resolving contract disputes besides litigation. These include, among others, negotiation, mediation, and arbitration. Negotiation should be considered throughout as it can be a quick and effective resolution whilst also maintaining the relationship between parties. This is also cost-effective.

Mediation involves a neutral third party that assists both parties in flushing out their respective interests and working towards a mutually agreed settlement.

Finally, arbitration may be already set out as a term of the contract. If that is the case, arbitration will be pursued and the decision of the arbitrator will be binding.

Contractual Obligations and Rights

A term in a contract may be an obligation upon a party or may confer a right to a party. Contractual obligations must be performed by the party obligated to perform them. Whereas certain rights are given to a party under a contract. These rights may have a fixed time to exercise them or may be indefinitely exercisable.

Importance of a Legally Binding Agreement

It is critical to have the elements of a contract to ensure that it is legally binding. If it cannot be enforced, then it is nothing more than a piece of paper.

A legally binding agreement means that if a breach occurs, the injured party can pursue its remedy through the courts by using the contract as evidence.

Written vs Oral Contracts

A written contract is easier to enforce and therefore more common than an oral contract. Both must meet the legal elements necessary to create a legally binding contract.

An oral contract is more difficult to rely on as it consists of solely spoken words and is challenging to prove. An essential element of oral contracts are witnesses and evidence as there needs to be someway to demonstrate the spoken words. This can be an oral contract created in the presence of a third party or other supporting evidence.

In certain instances, an oral contract will not be enforceable because of the Statute of Frauds that requires certain contracts to be in writing and signed by parties. Examples of such arrangements include real estate transactions, selling securities, and selling goods over a certain value among others.

There are some best practices to follow to have a more secure verbal agreement. It is recommended to document the agreements in writing whenever possible to demonstrate a clear record of communication. Confirming key terms in writing will also prevent contention and misunderstanding. As mentioned before, a witness may serve as evidence.

Material Breach and Its Consequences

A material breach is a breach so severe that it deprives the party of the very purpose of making the contract in the first place. It is sometimes referred to as a “total” breach. The injured party has the option to end the agreement and attempt to collect damages caused by the breach. They however must mitigate the damages resulting from the breach.

Punitive Damages in Contract Cases

One remedy that may be granted to an injured party depending on the circumstances of the case, is punitive damages. These damages go beyond compensating the aggrieved party and are specifically designed to punish defendants’ conduct that is considered to be grossly negligent or intentional.

This may be applied to the breaching party if the breach is a result of the above factors.

Specific Performance as a Remedy

Specific performance is another remedy that may be granted depending on the circumstances of the case. This is a remedy that forces the breaching party to perform a certain act that was either outlined in the contract or necessary.

This is requested by the injured party in cases where compensation through monetary means is not a sufficient remedy. This usually occurs when the contract is engaged for a very specific service or product that cannot be replaced by other means.

Repudiatory Breach and Legal Implications

A repudiatory breach can be viewed as a breach that is so serious that it deprives the other party of the full benefit of the contract. Once this is done, the injured party can decide to terminate the contract.

The legal test the court applies is to see whether the non-performance amounts to a breach that deprives the innocent party of substantially the whole benefit of the contract.

Reliance and Compensatory Damages

Reliance damages can be assessed in cases of contract breach. These damages are based on the extent to which someone has foreseeably relied on an ordinarily unenforceable promise.

They typically put the party in a position had the promise not been made in the first place. The damages suffered are based on the reliance on that promise which was not completed.

Compensatory damages are used to compensate the party for the gains realized by the breaching party or the expenses caused by them as a result of the breach. There are typically two types, general damages and special damages.

General damages are awarded for non-monetary losses. Special damages are awarded for monetary compensation for quantifiable losses.

Contract Law in Ontario – Common Legal Issues

Contract law is a large area of law that deals with many different types of issues and conflicts. Breach of contract is a common issue that is dealt with. Further, there may be some clarification needed by the parties to determine what is meant by a term that is included in the contract.

The court then can play the role of interpreting what was meant by the drafter. But the court will not advise on the business itself. Moreover, there may be issues as to whether there is a valid contract or not. The essential elements outlined above will play a key role in determining that.