When businesses in Southern California face a breach of contract claim, many turn to Hochfelsen & Kani, LLP, for assertive representation focused on cost-effective results. Our attorneys have helped countless clients resolve contractual disputes in an efficient and timely manner. When a contract dispute erupts, there are a number of urgent concerns: immediate losses from nonperformance, collateral damage to other contracts, strained business relationships, and reputational loss.
We employ a variety of strategies, depending on the facts of the conflict, but in every case, we are determined to protect your rights, minimize your losses, and deliver an outcome that advances your company’s best interests. We have served companies of all sizes in complex business litigation, from small businesses to large corporations. Whether you are the victim or your company is accused of a breach, you can rely on our experience and our determination as we work tirelessly to resolve your contract dispute.
What types of damages occur when a party breaches a business contract?
“Damages” is the legal term for the losses an innocent party to a contract suffers because another party has failed to perform according to the contract’s terms. The law allows you to recover compensation from the breaching party for several categories of damages, which include:
- General damages — This category of damages covers direct monetary losses that result from a breach. For example, if a materials supplier promised to deliver shingles at a set price, but the market price subsequently rose 20 percent, the supplier might choose to breach the contract rather than deliver the shingles at a loss. The buyer could then claim the 20 percent difference as damages.
- Expectation damages — This is the difference between what a party expected to make as profit on a contract and the actual profit due to the breach. This category of damages restores the innocent party’s benefit of the bargain.
- Incidental damages — Also known as collateral damages, this category covers indirect but foreseeable losses an innocent party incurs when the breaching party fails to perform.
- Liquidated damages — Written into some contracts is a term for damages to be paid if a party fails to perform in the manner specified by a certain date. A court will uphold liquidated damages as long as they are fair and do not constitute a penalty.
- Nominal damages — When a breach occurs, but the non-breaching party suffers no real monetary losses, a court can award nominal damages, a small sum that serves as the token amount of compensation.
- Punitive damages — Rarely awarded in a contract dispute, unless there is evidence of fraud or tortious behavior, these damages serve to punish the breaching party for egregious conduct.
- Attorneys’ fees — Many contracts have a clause that one or both parties can recover their attorneys’ fees if her or she prevails in a dispute. Where a contract has this clause, under California law either party may recover attorneys’ fees if he or she prevails, even if the contract states that only one party can recover fees.
It is important to note that a party that makes a claim for damages has a duty to mitigate. For example, if a commercial tenant decides not to change locations with six months remaining on the lease, the owner has a duty to offer the space for rent, rather than leaving the space empty and continuing to charge the tenant who broke the lease.
Equitable remedies available in breach of contract cases
In addition to, or in lieu of monetary damages, a court may order injunctive relief, also known as an equitable remedy. In doing so, the court orders one or both of the parties to take some type of action or to refrain from acting. Equitable remedies include:
- Specific performance — The court orders the breaching party to do whatever the contract says he or she must do. For example, if a party promised to deliver aluminum at a set price, but then breached the contract because he or she found a buyer who would pay more, the court could order specific performance of the first contract.
- Rescission and restitution — The court voids the contract so that no further performance is necessary. But the party who has partially performed can collect the reasonable value of that work from the other party.
- Reformation — In cases where there is a misunderstanding of what is expected, or where the contract language does not accurately convey the parties’ agreement, the court can order the contract to be rewritten in more precise language to capture the true understanding of the transaction.
Courts order equitable remedies when monetary damages are not appropriate and the action ordered would be fair to the parties.
Decisive steps to mitigate damages and obtain positive results
At Hochfelsen & Kani, LLP, we understand that clients risk significant financial losses when a contract has been breached. That is why our contract lawyers take a proactive approach to each breach of contract claim. However, it’s important to remember that the earlier you contact us, the easier it may be to reach a swift resolution. Often, if a client contacts us when a breach first occurs or even when they suspect a breach is imminent, we can resolve the issue through a phone call, a demand letter, or negotiations with the other party’s attorneys.
But, as time passes, the stakes are raised, because the conflict causes mounting losses. Ironically, the innocent party can suffer additional losses, because they didn’t get timely advice on their duty to mitigate damages. To avoid compounding the problem, contact Hochfelsen & Kani right away.
We respond immediately by reviewing your contract and investigating the facts behind the alleged breach. We assess the situation and inform you of your various options. Then we pursue an aggressive strategy to protect your rights.
Alternative forms of dispute resolution for breach of contract cases
Although we are skilled and aggressive trial lawyers, we realize that going to court is not always the fastest and most cost-effective way to protect our client’s rights. We have had great success in traditional negotiation, mediation, and arbitration of contract disputes. When other methods reach an impasse, we are ready to go to court, where we fight to deliver the best possible results.
Experienced representation for either side in a business contract dispute
As business litigation attorneys, we prosecute and defend breach of contract actions. If you believe a party has breached your agreement, or if you’ve been accused of breaching, we can capably represent your interests. We have extensive experience presenting compelling arguments for each of the necessary elements in a breach of contract case:
- Has a breach occurred?
- Did the breach cause harm to the nonbreaching party?
- Are the damages claimed reasonable?
- Did the non-breaching party act reasonably to mitigate damages?
- Is the liquidated damages clause in the contract enforceable?
When you retain our services, you get an experienced team of skilled advocates working tirelessly to protect your interests.
Resolving breach of contract claims for a wide range of small to medium-sized businesses in Southern California
Our Newport Beach breach of contract attorneys help California clients resolve legal disputes related to a variety of business transactions, such as:
Whatever the issue, you can trust our seasoned business litigators to manage your case professionally from start to successful finish.
Newport Beach, CA, Attorneys for Contract Disputes
When your company faces a complex legal dispute or complaint, Hochfelsen & Kani, LLP, is in a strong position to help. Contact us at 714-907-0697 to discuss your legal goals.