Last week, the Connecticut business that owns the Single-A Staten Island Yankees filed a breach-of-contract lawsuit against Major League Baseball and the New York Yankees in New York state supreme court. The Single-A Staten Island Yankees have been struggling to bring in fans. As a result, the New York Yankees dropped their affiliation with the team. The owner of the Single-A Staten Island Yankees is claiming that by dropping the affiliation with their team, the MLB and New York Yankees are in breach of their contract.
The breach of contract lawsuit brought in the case mentioned above is just one example of the hundreds of contract lawsuits heard by New York judges every month. Every day thousands of businesses enter into contracts with other businesses and customers. Our entire economic system depends on the right to enforce these contract rights should one of the parties breach the agreement. What elements does a plaintiff need to prove to succeed in a breach of contract lawsuit in New York?
- A Legal Contract Exists
The first step in bringing a successful breach-of-contract claim is to prove that a legally valid contract existed in the first place. Courts can only enforce the terms of legally valid contracts. Contracts are essentially legally binding promises between two people or businesses. Even though modern business contracts are often complex written documents, oral and written contracts are legally enforceable, depending on the circumstances.
Under New York law, a valid contract must have an offer, acceptance of the offer, and consideration. Consideration means that both parties to the contract give and receive something of benefit. For example, if one party agrees to pay $500 in exchange for 20 pairs of leather boots, consideration exists because both parties are receiving something of benefit. One party is receiving $500, and one party is receiving 20 pairs of leather boots.
However, suppose that one party is obligated to give the other party 20 pairs of leather boots in exchange for a handshake. In this case, there is no consideration because the party giving away the leather boots is not receiving anything of benefit.
Many contract disputes involve poorly drafted written documents or oral contracts. It’s always a good practice to work with an attorney to draft your business contracts. When you work with an experienced business lawyer, you can rest assured that your lawyer will provide you with an enforceable and well-written contract.
- The Plaintiff Performed the Terms of the Contract
You will only be able to bring a successful breach-of-contract lawsuit when you have met the terms of the contract yourself. When both parties are failing to adhere to the terms of the contract, a court will not hear a contract dispute. As the plaintiff, you will need to show that you have performed your duties under the terms of the contract. The defendant may claim that you have not fulfilled your responsibilities under the contract. If this happens, your business lawyer will be able to argue that you have done so and it is the defendant who is in breach of the contractual agreement.
- The Defendant Failed to Perform the Terms of the Contract
Next, you will need to prove that the defendant has breached the terms of the contract. A contractual breach occurs when one party does not perform its contractual obligations. A contractual breach can include any of the following:
- The defendant fails to provide goods or services in adherence with the contract
- The defendant fails to issue payments on time
- The defendant fails to meet the deadlines or other terms outlined in the contract
- The defendant misinterpreted the terms and conditions of the contract
You will need to show that the defendant engaged in a material breach of the contract. A material breach is so substantial that it defeats the entire purpose of the contract itself. For example, suppose you have entered into a contract with a human resources consulting company that promises to audit your Human Resources policies within a three-month time frame. The contract states that prompt delivery of the audit is expected and that time is of the essence. The Human Resources company does not finish the audit until five months after the contract was signed. This example is an example of a material breach.
On the contrary, suppose that you hire a construction company to remodel your bathroom within a reasonable time frame. The contract itself does not provide a specific time frame. The contractor takes two months to finish the remodeling process. However, they do a good job and finish all of the requested tasks. In this case, it will be more challenging to prove that the breach was material.
- Damages Resulted
Finally, the plaintiff will need to show that the breach of contract caused damages. Successful plaintiffs are entitled to two different types of Damages for material breach of contract in New York. First, they are entitled to direct damages. Direct damages include the difference between the value of the promised goods and the goods that were provided.
For example, suppose a construction company entered into a contract to remodel a sink, shower, and toilet area of a bathroom and only remodel the sink and shower. In that case, the plaintiff is entitled to direct damages for the remodeled toilet area’s value. Successful plaintiffs are also entitled to any consequential damages from the material breach of contract. Consequential damages can include a loss of goodwill, lost profits, and the costs associated with correcting the breach of contract.
Contact a New York Breach of Contract Lawyer
Breach of contract lawsuits can quickly become complicated. If you need to bring a claim for breach of contract, you need an experienced lawyer on your side. Contact the skilled New York City breach of contract lawyers at Thomas Weiss & Associates today to schedule your free initial consultation.