Contract Law - Remedies For Breach of Contract Part 1
How to File a Breach of Contract Lawsuit
A contract occurs when you make a deal with someone else to do things for each other. Contracts don’t have to be written. Rather, a contract exists whenever both sides give something up to get something of value. For example, if you agree to help a friend move in exchange for a batch of homemade cookies, you and your friend have a contract. If the other side fails to live up to her side of the bargain, you can sue for breach of contract.
Filing in Small Claims Court
Check the of the small claims court nearest you.As the name implies, small claims courts only resolve disputes involving relatively small amounts of money.
- The maximum amount for which you can sue varies between , but normally is between ,000 and ,500.
- Small claims courts have more informal procedures than state or federal courts and lower filing fees. Also known as “people’s courts,” litigants in small claims courts typically don’t hire attorneys, and some states don’t permit them at all.
Find the right small claims court where you can file your lawsuit.As in any other court case, the court must have jurisdiction, and your suit can’t be filed too late.
- Your state has a that governs how long someone has to file a lawsuit against someone else after the dispute occurred. In breach of contract cases, you usually have to file within five years.
- Small claims courts typically hear cases involving people who live in the same local area. If the person who breached your contract lives in a different county, you may have to file in the small claims court in their county, or in state court. Check with your local court clerk to be sure.
- Small claims courts also are a good option when you have an agreement with a friend or family member for a small amount of money or a barter agreement for other services that wasn’t completed.
- For example, suppose you make a deal with your next door neighbor that if you feed and walk his dogs for a week while he’s out of town, he’ll paint your porch when he returns. You do your part of the deal, but it’s been a month since he got back home and he refuses to paint your porch. This case more than likely belongs in small claims court: you both live in the same town, and you have a claim that probably isn’t worth much money.
Draft your claim.To have your case heard in small claims court, you’ll have to draft a claim telling the judge who you are, what your problem is, and why you deserve to be compensated. The small claims clerk of court should have a form that would fit your situation.
- In a breach of contract suit, you must prove that a contract between you and the person you’re suing existed, and that they broke that contract. You also must prove that you suffered loss and should be paid damages as a result.
- Small claims courts ordinarily can award monetary damages for a claim, but can’t award other remedies such as court orders to do something, or stop doing something.
File your claim.Once you’ve finished filling out the forms, take them to the clerk’s office and pay the necessary fees.
- You may receive a date for your hearing when you file your claim, or the date may be mailed to you later. Every small claims court has a different procedure, but the clerk will tell you when you file.
Serve your claim.After you file your claim, you have to let the other side know about it. This way they know what you’re asking for and when the trial will be so they can show up and be prepared.
- Formal service of process also lets the court know that the other side knew about the claim and the hearing. If you’re the only one who shows up for your hearing, the judge will automatically rule in your favor -- but only if you can prove that the other side knew when and where to appear.
- You cannot personally serve the court papers on the other side. You must get another person, over the age of 18, who has nothing to do with your case. The clerk’s office probably has a list of process serving companies in your area.
- Some small claims courts also require you to file a proof of service of process once the other party has been served.
Filing in State Court
Review the contract provisions on which state’s law applies and where disputes may be heard.If you have a written contract, it may have included a clause requiring a breach of contract suit to be filed in a certain state court.
- Written contracts also often include a statement, usually in the miscellaneous provisions at the end of the contract, that a particular state’s law must be used to interpret the contract. Usually you want to file your lawsuit in that state.
- If the contract is silent about where you should file a suit, or if you don’t have a written contract, the state where you need to file typically will be the state where the other party lives or where the contract was signed.
- If you could file in more than one state, you can pick the one that would be more convenient for you.
Find the right court to hear your case.States often have different court divisions for different types of cases, so you need to find the civil division that hears breach of contract cases.
- Some states divide courts based on the amount of money at stake, or whether you’re requesting an equitable remedy such as a court order.
- Check with the clerk of court or consider hiring an attorney if you can’t figure out which court has the authority to hear your case.
Draft your summons and complaint.The clerk’s office may have sample forms you can use as a guide to ensure you’re formatting everything correctly and have all the information you need. Different courts may require different documents.
- As with a claim in small claims court, your complaint needs to show that a contract existed between you and the person you are suing, that the person you’re suing broke that contract, and that you suffered losses as a result.
- You also need to detail precisely when the breach of contract occurred, or when you knew about it, to demonstrate that you filed your suit within the state’s statute of limitations.
- Apart from monetary damages, you can also ask the judge for “specific performance.” If you win your case, the judge would order the person you sue to do what they promised to do under the contract. This remedy usually is reserved for situations in which whatever was offered was so rare or unique that money isn’t enough to make things right.
Make at least three copies of every document.You’ll need a copy for the court, a copy for yourself, and a copy to be served on the person you’re suing.
- If you’re suing more than one person, you’ll need copies for each of those people.
File your documents with the clerk of court.The court you found to hear your case will have a clerk’s office, and you’ll file your summons and complaint there, along with any other required documents. #*When you file, you’ll have to pay a filing fee. The fee varies from state to state and also depends on the amount of money at stake in the lawsuit, but usually is between 0 and 0.
- The clerk will give you back stamped copies and tell you when your first court appearance is scheduled.
Have the other side served.You must have someone serve the documents on the person you’re suing. The clerk’s office will have a list of process servers in your area, and you can hire one of them for a fee.
Filing in Federal Court
Consider hiring an attorney.If you think you have a federal case, you should also understand that filing suit in federal court is complex, time consuming, and expensive. An experienced attorney already knows the system and its procedures.
Analyze your case’s jurisdiction.To sue in federal court, you must show that the court has jurisdiction over both the subject matter of the suit and the people in the suit.
- Federal courts only hear contract law cases when the parties to the case have a diversity of citizenship.
- This includes situations where you and the person you are suing are citizens of different states, as well as those in which the two of you are citizens of different countries.
- If you’re suing a corporation, you probably need an attorney. Diversity jurisdiction of corporations is a more complicated matter, since corporations can be “citizens” of more than one state.
- Even where the two parties are diverse, federal courts only have jurisdiction in cases where more than ,000 is at stake.
- Most lawsuits that can be filed in federal court can also be filed in state court. Usually you’ll have a simpler, cheaper, and quicker resolution if you file in state court.
Draft complaint.As in state court, you’ll have to draft a summons and complaint that discusses the facts of your case, applies the law to those facts, and asks for monetary damages or other relief for the losses you’ve suffered.
- Your complaint must first discuss the facts of the case. Specifically, you should outline the terms of the contract, any acts performed under the contract, and all actions that led up to and culminated in the breach of the contract.
- Despite the fact that you’re in federal court, contract law is a state law issue. Thus, your complaint needs to state what state law applies, and how that law would interpret the facts of your case. You should also make note of the state statute of limitations and ensure you’ve filed your case before that deadline.
- Review some sample complaints to make sure you’re using the correct format.
File your complaint.The filing fee for opening a civil action in federal district court is 0.
- If you cannot afford to pay the filing fee, you can file a request to have the fee waived. If your request is granted, you want have to pay the fee.
Have the other side served.As with state court, federal court requires you to use a process server to present the documents to the person you’re suing and give them notice of your lawsuit and when they need to appear in court.
Entering Mediation or Arbitration
Determine if the contract requires mediation or arbitration.Some contracts may include a special provision requiring any disputes be handled through “alternate dispute resolution,” which includes the selection of a mediator or arbitrator.
- The contract may specify certain qualifications, such as board certifications or association memberships, that the mediator or arbitrator must have.
- Generally, mediation is a more casual and collaborative experience, while arbitration involves more formal, court-like rules and procedures.
- Arbitration replaces a trial and the resolution is legally binding. Mediation typically is not legally binding.
- Unlike a lawsuit, which is a matter of public record, mediation or arbitration is confidential.
- Even if your contract doesn’t specifically require mediation or arbitration, you can still choose this method over a traditional, formal trial if you want. Alternative dispute resolution is particularly attractive if you want to maintain a friendly relationship with the other party.
Find a local mediator or arbitrator.Keep in mind any specifics listed in the contract. If there was no detail in the contract to guide you, your local court or bar association may have a list of recommended mediators and arbitrators.
- You can also search for an arbitrator or mediator using a national service such as the .
Notify the other side.Although mediators or arbitrators won’t necessarily have the same formal service procedures as the courts, the more collaborative, voluntary process requires both parties to be aware and present.
- The clerk of court can provide most of the information you need to file a lawsuit, but cannot give you legal advice. If you are unsure of something and the clerk cannot answer your question, you should speak with an attorney.
Video: What is BREACH OF CONTRACT? What does BREACH OF CONTRACT mean? BREACH OF CONTRACT meaning
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