by James C. Glassford, Attorney at Law

by James C. Glassford, Attorney at Law

Wednesday, October 10, 2012

How to win a contract claim!


     If you can't get the other party to perform on a contract and the other party won't return your phone calls, send him a wakeup call.
     Filing a lawsuit is the biggest wakeup call you can give anyone.  No one likes to be sued, not even insurance companies.  There is nothing like a lawsuit to get people in the mood to pay money.
     Setting your case for trial is the next biggest wakeup call you can send.  The mere thought of going to court for trial gives people nightmares.  This puts the pressure on the other party to pay your claim. 

How to Win a Contract Lawsuit!

     To win your claim for breach of contract, you must prove that the other party promised to perform something under the contract and breached that promise.  Further, you must show your damages caused by the breach.

1.  What was promised?  In most contracts, one party promises to give something such as a car or a plastic mold injection machine.  The other party promises to pay.  In a valid contract, these promises turn into legal duties to give or do what was promised.  Thus, each party has the legal right to the other’s performance.  The failure to perform may be a breach of contract.  If so, you have the right to sue for damages.

2.  Is a promise conditional?  Many promises are subject to conditions.  For example, a buyer may promise to pay $500,000 for a plastic mold injection machine, subject to getting a loan.  If the loan doesn’t come through, the buyer is off the hook.  Conditions must occur before you have a right to sue.  You must be able to prove that all conditions have been satisfied or excused. 

3.  Have you performed?  Further, you must be able to prove that you have performed or you were ready, willing and able to perform at the time of the breach.  

Let’s go back to the buyer who promised to pay $500,000 for the plastic mold injection machine on delivery of the machine.  Assume the day comes for the parties to perform.  The buyer demands delivery of the machine from the seller.  The seller refuses to deliver.  Is the seller in breach of contract?  It depends on the facts.

If the buyer puts $500,000 on the table, say in the form of a check from the bank, then seller is in breach.

If the buyer could not get the loan and has no cash, then the seller is not in breach.  You have to put the seller in breach by giving him the $500,000 or offering to do so with the ability to deliver the money.     

4.  Are there any defenses?  If you file your lawsuit in court too late, the statute of limitations could prevent you from recovery of damages.  The time limit for an oral contract is two years; for a written contract, four.  Sometimes, you can get around the statute of limitation.   Another defense is the statute of frauds.  This requires some contracts to be in writing.  For example, if you buy a TV or car for $500 or more, the contract must be in writing.  Many other defenses, such as fraud, mistake, or impossibility, can be raised, depending upon the facts and circumstances of a particular case. 

5.  Should witness statements be taken? The best way to discover what you can prove in court is to take statements of witnesses.  Sometimes witnesses do not want to be bothered.   They will even lie to you to avoid committing themselves to testify later.  If a witness is cooperative, however, a statement will also serve to bolster a faulty memory.  When a case eventually comes up for trial, many a witness will conveniently forget the facts, unless you have a statement to keep him honest.

6.  Are documents important?  There is nothing like a written document to prove a fact in court.  Witnesses can swear to tell the truth, but juries and judges can ignore such evidence if they choose not to believe it.  They are hard pressed to disbelieve facts contained in a written document.

7.  What is the value of your case?  Your case is worth only what damages you can prove.  Contract damages are notoriously limited by the UCC and the common law.  Even without legal limitations, parties often limit damages further by agreement in the contract itself.  For example, carriers, like FedEx, often limit damages to $100 for lost or damaged goods given to them for transport and delivery.  If you want to buy insurance to cover a higher loss, you are free to do so.  Although public policy will prohibit some limitations on damages in contracts, the parties are free for the most part to limit them as they see fit.  

8.  Should you get help?  As Lincoln said, “One who represents himself has a fool for a client.”  From the above, you can see that too many traps for the unwary exist in litigation.  Find a lawyer with experience to represent you.  


     Don't like the idea of suing in court and the endless hours of sitting in the hallways waiting for your case to be called?  Arbitration may be the way for you to resolve your contract dispute.  It can be a more speedy and less expensive way of getting justice.
     First, you must have an arbitration clause in your contract.  Second, both the federal courts and the state courts will enforce an arbitration clause.