Contracts are the lifeblood of your business. Without them, your business would not be able to function. If all of your deals were in oral form, you would have little certainty and much risk. However, as much as you aim for certainty with all of your contracts, there may invariably be disputes that occur when you and another party have differing opinions about what your legal obligations are under a contract. Depending on the contract, there could be a significant amount of money at issue in a contractual dispute. Losing a breach of contract case could set your business back months or even years.
A contract is a legally binding obligation that gives you both rights and obligations. Unfortunately, the parties to contracts may end up in a dispute during the period of performance or afterward. In some cases, the dispute can end up leading to litigation between the parties. If you find yourself in a contract dispute, you should contact our experienced Houston breach of contract lawyers to help protect your legal interests.
Contract Disputes that Can Lead to a Lawsuit
When one party does not fulfill its obligations under an agreement, it is breaching the contract. When this occurs, the party harmed by the breach needs to consider all options, including litigation.Here are some examples of common contractual disputes that could lead to litigation:
- One party breaches a material term of the contract. For example, they may not perform their obligation in time, or they may not pay in accordance with the terms of the contract.
- The two parties could disagree over what a specific term in the contract means, requiring the court to engage in contractual interpretation.
- The terms of the contract are grossly unbalanced, or there are other reasons why the contract should not be enforced.
- One party may want to exercise their contractual right to terminate the agreement, and there is a dispute about whether the threshold that allows for termination has been reached.
- One party believes the other will not perform under the contract and has repudiated it.
Ideally, you should have had a business lawyer either help you draft the terms of the contract or review them before you signed it. In many cases, an attorney is called into the case long after the agreement has been signed, once the parties are experiencing issues in the performance phase. Unfortunately, you have to take the agreement as you signed it, regardless of whether it was what you intended. A court is only interested in your intention if the language of the contract is unclear.
Remedies in a Breach of Contract Lawsuit
There are various remedies you may seek when you are involved in breach of contract litigation, including:
- Monetary damages – These are the most common remedy in a contract case, as the court tries to put you in the same position you would have been in if the agreement were fully performed.
- Rescission – In some cases, you could ask the court to completely set aside the agreement as if it were never signed. For example, if the terms of the contract are grossly unfair, you may ask the court to rescind it completely.
- Specific performance – In rare cases, the court could grant one party equitable relief that would order them to perform in accordance with the terms of the contract. Usually, courts would opt for the remedy of money; however, if one party can make a showing that equitable factors demand it, the court may order specific performance. An example of a dispute for which specific performance could be the most appropriate remedy is when one party tries to walk away from a merger agreement.
What To Do If You Are Sued for Breach of Contract
You may be the defendant in a breach of contract lawsuit when another party believes you have not performed your obligations. Being sued for breach of contract can present difficulties for your business, both in terms of the agreement at issue and the attention it requires from you, which prevent you from devoting that attention to your business operations.
If you have been sued for breach of contract, your attorney will review your legal situation with you and determine whether you have any available defenses. They will also consider the possibility that you may be able to file a countersuit against the plaintiff. Breach of contract lawsuits are not always one-sided. Both parties can accuse each other of wrongdoing.
Defenses to a Breach of Contract Lawsuit
Some of the available defenses you may use if you are sued for breach of contract include:
- The term of the contract at issue is insufficiently clear to impart obligations on you
- The defendant coerced you into signing the contract, or they gained your signature through fraud
- You performed your obligations in accordance with the terms of the contract
- Something the defendant did impeded your ability to perform
- There was an excusable reason why you are not able to perform as required
- The plaintiff waived or discharged your obligations under the contract
Resolving a Contractual Dispute Without Litigation
Whether you are the plaintiff or defendant, there are potential resolutions to your case that can help you avoid extensive litigation. When you hire an experienced contracts attorney, they may work with the other party to the dispute in order to seek a resolution. You may consider a mediator or some other form of alternative dispute resolution for your case that can help keep you out of court.
In reality, most breach of contract cases do not ultimately end up in front of a judge or jury at trial. Either the two parties are able to work their dispute out on their own before turning to litigation, or they may reach a settlement agreement during litigation. Nevertheless, hiring a Houston breach of contract lawyer could increase the chances that you reach a resolution of your case without a trial. It is always better to talk through a dispute because it is more cost-efficient and less of a hassle. Going through litigation to trial will generally only be a last resort after other attempts to solve the problem have failed.
Why You Need an Attorney for a Contract Dispute
A breach of contract attorney can help your case by doing the following:
- They can review the terms of the contract to determine the strength of your case
- They can argue why a disputed term means what you say, based either on the plain language of the agreement or extrinsic evidence, if necessary
- They can engage the other party in negotiations to resolve the dispute
- They can help you calculate the damages caused by the breach
- They can argue your case in front of a judge or jury should the litigation go that far
It is essential that you hire an attorney as soon as you suspect there may be a potential dispute. How you act in the face of a contract dispute could help determine your overall chances of success in the case. For example, if the other party can argue that you have a course of dealing that reflects poorly on you, it could be used against you in a lawsuit. Your breach of contract lawyer could immediately give you advice that could potentially strengthen your legal position.
Call a Houston Contracts Dispute Attorney Today
The Houston attorneys at Feldman & Feldman can counsel your business, whether you are the plaintiff or defendant. We have helped numerous businesses in contract disputes at various stages of the process. If your case goes to trial, we are persuasive litigators who have extensive courtroom experience. To speak with an experienced Houston breach of contract lawyer, contact us today to schedule a consultation.