If you have entered into a contract and fulfilled your obligations but cannot get the other party to do the same, you may want to sue for breach of contract. A breach of contract usually occurs when a party fails to perform as promised, when something makes it impossible for the one party to perform as promised, or if there is a known intention that one party will not be performing as agreed. Lawsuits can be a headache. In some cases, though, they are the only way to get what you are legally owed. The process may seem overwhelming, but with the right preparation, you can successfully sue someone for breach of contract.
EditSteps
EditPreparing to File Your Suit
- Determine whether you have a valid contract. To sue someone for breach of contract, you must first prove that the contract existed and was valid. [1]
- While the word “contract” generally refers to a written document, a writing is not always necessary to create a contract. A contract may be written or oral.[2]
- For example, if the parties agree to a contract with the intention of writing it down later, a contract is created even if the parties never actually write it down.
- If you have an oral contract, you may present evidence of that contract to the court to prove that you had an agreement with the other party. Oral contracts, however, may be difficult to prove.
- Some contracts must be in writing. The Statute of Frauds dictates which contracts must be in writing to be valid.[3] Examples of contracts that must be in writing include contracts for:[4]
- The sale of real estate or land
- Goods valued over $500
- Paying another person's debt
- Marriage
- Agreements that will last longer than one year
- Transferring property after a death
- Determine whether a breach of contract has occurred. Breach of the contract occurs when a party who owes something under the contract fails to provide that good or service. This failure must be severe to be considered a breach.[5]
- For instance, if you hired a contractor to paint your house, he would not breach the contract by showing up late, but would breach the contract by never showing up at all.
- Determine whether you are within the statute of limitations. All states have statutes of limitations. These are laws provide the time limit for filing a suit.[6]
- The statutes vary based on your state as well as the circumstances of your case, the type of case, and whether you filed your claim in federal or state court. All of these factors will change the deadline for filing suit.
- The deadline for filing a civil suit, such as breach of contract, is generally between 2 and 6 years. Specific information on your state’s statute of limitations for a contract claim can be found online.[7]
- The time begins to run once you realize the contract has been breached.[8]
- Determine if the breach is material and caused damages. The law requires that a breach be serious and that it caused damages before a party may sue for breach of contract. Damages must be in the form of lost money.[9]
- For example, imagine you are a painter and you make a contract to paint someone's house for $10,000, payable on completion. When you finish painting the house, the owner doesn't have the money. He pays you two days later. You will not usually have any damages from the delay. He still received a completely painted house and you still received $10,000, even if you did receive it a couple days later than you expected. Such minor differences from the contract agreement are not usually enough for a lawsuit.
- On the other hand, if you painted the house but the owner never paid you at all, you lost $10,000 worth of time and paint. This would be considered a material breach.
- Keep track of all damages. Make sure that you keep records of any financial damages that you may have. Calculate any money that you have lost and any other negative effects you have suffered from the breach of contract.
- For example, even if you didn’t directly lose money as a result of the breach, you can claim damages if you lost some other benefit that had a monetary value, such as a job.[10]
EditFiling Your Lawsuit
- Determine whether you can go to small claims court. If the amount in dispute is less than the small claim limit of the state where you file suit (usually between $1,500 and $15,000), you may file in small claims court instead of county civil court.[11] Check with the county clerk’s office to determine what the small claim limit is.
- Small Claims Court is less formal than civil court and is designed to allow parties to represent themselves, saving the cost of attorney fees.
- Many of the complicated rules of civil court do not apply in small claims court. Suing in small claims court instead of civil court, however, means that you must give up some of your rights, such as the right to appeal.[12] You may wish to talk to an attorney to determine if civil court or small claims court is best for your suit.
- Choose the right court. Each of the parties’ state and county of residence and the contract itself will help you determine which court is most appropriate. You may need to consult an attorney to determine the appropriate court for your suit.[13] If your contract does not specify which court has jurisdiction, here are some guidelines:
- If all parties to the contract are residents of the same state, you may file your suit in any civil court or small claims court in your county or the other party’s county.[14]
- If all parties to the contract live in different states, the contract may determine that one of those states will have jurisdiction. If so, you will likely need to file suit in that state’s civil court, and in the county of the party who lives there. [15] You may wish to contact an attorney to determine if there is a way around the jurisdiction clause.
- If all parties to the contract live in different states and the contract does not specify which one will have jurisdiction, you may be able to file suit in your state and county.[16] If the case involves a large amount of damages, you may need to file in a federal court.[17]
- You may need to file in federal court if your case is based on any federal law (for example, a business contract that violates federal antitrust laws) or if you are suing a citizen in a different state and asking for at least $75,000 in damages. This is called diversity of citizenship and if you can fulfill this requirement, then the subject matter of the case will not matter. Keep in mind that there must be "complete diversity" -- its best to consult with attorney to determine whether you fit in this category or not as it requires extensive fact checking and analysis.
- Research state laws on serving the other party. The rules in any lawsuit require that you provide the other party with notice of the lawsuit and give him or her an opportunity to respond. Providing this notice is called "serving" the defendant. State laws about this process vary.
- Your state may require personal service of the complaint and summons in a breach of contract suit. Find your state's requirements online.[18]
- Your state may require a signature from an appropriate person when serving a defendant. Check with your state’s rules of procedure for service or with your attorney to find out if this is is the case. It may be enough for the server may leave a copy of the complaint and summons at the defendant’s home or work. If a signature is required, you will need to arrange for service when the defendant or another adult is present.[19]
- If allowed, service by mail is often sufficient and reliable, and is usually less expensive. In many cases, however, personal service will be required by law.[20]
- Obtain a complaint form. To sue someone for breach of contract, you must prepare a document called a complaint that you will file with the court. These forms differ slightly from one state to the next. Make sure you format you complaint correctly.
- If you are representing yourself, use a legal book or CD of legal forms to write out your complaint. You can also copy the style of an existing complaint you find on the internet or from another breach of contract lawsuit. These materials are especially useful if you are going to small claims court.
- If you hire an attorney to represent you, they will help you prepare the complaint, or prepare it for you.
- Plan on making at least three copies of the complaint.
- File your complaint. Statutory requirements state that some complaints have to be typed on a specific type of paper or on forms that approved by the court. It is best to check in with the court to find out the requirements before filing your complaint. Most complaints include the grounds for your breach of contract lawsuit and other information, such as:[21]
- The names and addresses of each party to the contract.
- A statement explaining why the court has jurisdiction over the lawsuit.
- A description of the contract involved.
- An explanation of how the defendant violated the contract and the damages you suffered. This is also known as the cause of action.[22]
- The amount of money you seek to recover the losses caused by the defendant's breach of contract.
- Await a summons. After you file your complaint, the court will issue a summons that includes the file number of the lawsuit, the names of the parties involved, and instructions for the defendant on how and when to respond with an answer. A copy of this and the complaint must be served the defendant in order to receive a response.
- Serve the other party. Provide the defendant with legal notification of the lawsuit. The person serving the paperwork must do so within the time allotted in the paperwork and fill out a proof of service form that details how, when, and where they served the paperwork to the defendant. Some things to consider when attempting to do this:
- The state cannot locate the defendant for you. You must track them down yourself.
- If personal service is required, you will typically need to have the county sheriff or a process server serve the defendant. You are not allowed to serve the defendant yourself. [23] You can, however, ask a friend, coworker, or anyone who is over 18 years old and not party to the case to serve the paperwork for you.
- You can locate a process server by checking the phone book or an online phone directory. When serving via the county sheriff, the clerk’s office and/or the court will take care of making the arrangements.
- Personal service may or may not be offered by your county sheriff’s department. If the sheriff offers personal service, there may be a fee. Call the county clerk or the sheriff’s office to determine if process service is offered, and what the fee is.
- If you have hired an attorney, he or she will be able to advise you as to the best way to serve the defendant.
- Prepare for your hearing. There are many things to do between filing your lawsuit and attending your hearing. This is a good idea to consult with an attorney, especially if your case will not be in small claims court. You will need to:
- Make copies of the contract for the defendant and the judge, and have them ready for the hearing. You will want to ask that the contract be included as evidence. If you hire an attorney, they will take care of this for you.
- Highlight any part of the contract that you intend to refer to in court, such as the specific clause the defendant breached.
- Prepare any witnesses who you will call to testify. Make a list of the questions you will ask them. Again, if you hire an attorney, they will guide you through this process.
- Avoid calling friends and family as "character witnesses." Instead, find parties who have direct firsthand knowledge of the specifics of the contract and the breach.
- Be sure that you know what the witness plans to say in the testimony ahead of time so that you are not caught off guard during the trial.
- Conduct discovery. Discovery is the process of finding out what evidence the other party will present. You can do this by sending interrogatories, or request for production or admission. These are formal requests for the evidence the defendant will use in court. You will want to talk to an attorney for information about discovery rules and help with the process.
- Attend your hearing. Show up at your court date and present your case. Your opening statement should tell a story about your claim, the damages you suffered because of the breach, violations of terms in the agreement and why the other party was at fault.
- If an attorney is representing you, follow all instructions they provide. If you are representing yourself in small claims court, be prepared to lay out your case in a clear and articulate way.
- Be sure to follow all the rules and comply with appropriate Courtroom decorum, such as calling the judge, “your honor” or “judge” and only speaking when it is your turn.
- For example, you might say "Your Honor, this is a matter of a web designer who did not carry out his contract to build my coffee shop website in Queens, NY, after I paid him the full amount of $5,000 on May 1, 2014."
EditTips
- If you have any reason to believe the defendant may attempt to hide from service, it is best to pay for personal service by a sheriff or process server.
- Many states and county clerk’s offices offer forms, instructions, and other help for litigants who chose to prepare their own pleadings and/or represent themselves in court. Check your state’s website, and the website of county clerk’s offices in your state, or visit your local clerk’s office.
- If your lawsuit is successful, you may be eligible for one or several of the following:
- Specific performance (forces the breaching party to do what was laid out in the contract)
- Damages (payment by the breaching party to the other party)
- Restitution (If the non-breaching party has already performed, this remedy entails making the non-breaching party whole by putting him in the same position as he/she was before the breach occurred)
EditWarnings
- When preparing your own complaint or other pleadings to file with the court, you are expected to know and follow all of the rules concerning the form and filing of pleadings. It may be wise to consult with an attorney before filing any pleading you have prepared yourself.
- This article constitutes legal information, not legal advice. For legal advice, contact a licensed attorney.
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EditSources and Citations
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