Business Agreements and Litigation
A business dispute starts with a contract
The best strategy is to build strong contracts and retain the ability to enforce them.
The best way to avoid a contract dispute is to ensure your contracts are strong enough to ensure your future. They are a fundamental tool for business stability and success, regardless of your size or structure.
By working with an experienced small business contract lawyer to draft effective agreements, you take significant action to avoid a later breach of contract lawsuit. Contracts are legally binding, and they play a role in nearly every aspect of a business — including agreements with vendors, contractors, employees, customers, landlords, and tenants.
Mendes Weed, LLP will play an active role in every phase of creating, negotiating, and executing a contract, including the following actions:
- Assessing the proposed business arrangement and envisioning possible future scenarios
- Negotiating with the other party to reach terms amenable to both sides.
- Creating and formalizing a written agreement.
- Enforcing contract requirements that are not fulfilled as agreed.
When a Contract Dispute Occurs
The firm’s attorneys have the ability to think strategically, not just in terms of the legal aspects of a case. They will work diligently to achieve a solution that both protects and serves your interests.
Disputes may include but are not limited to those associated with:
- Offer and acceptance
- The definition of a technical term used
- Contract drafting and review
- Errors in the contract
- Coercion or fraud
- Breach of contract
Contracts typically end when both parties have fulfilled their obligations as laid out in the document. It’s not uncommon, though, for one party to fail to fully complete all portions of the contract. Contracts can be breached in part or in whole.
A breach of contract lawsuit must prove several elements to be successful:
- The written agreement must be valid and must include essential components like an offer, acceptance, and mutual consent of the parties. Verbal contracts can stand up in court, but certain types of contracts must be in writing.
- The plaintiff in the case must demonstrate how the defendant breached the agreement.
- The plaintiff must demonstrate that he or she met all requirements of the contract.
- The plaintiff must have provided notice to the defendant of the contract breach.
Remedies for Business Disputes
In some cases of alleged contract breach, parties can come to dispute resolution through mediation or arbitration. When negotiating doesn’t work, however, a case may go to court. If you sue another party for breach of contract, you may be entitled to one or more possible remedies:
- Damages, or a monetary award, can be compensatory or punitive. In addition, a court can award nominal damages when a breach is proven but no loss of money occurred and liquidated damages identified within the terms of the contract.
- When a contract is unique and monetary damages may not make the plaintiff whole, a court may award specific performance — a requirement that the defendant go through with the terms of the contract.
- If the defendant has received a benefit from the contract, a court may cancel the contract and allow the plaintiff to sue for restitution — or restoration of the plaintiff’s state prior to the contract.
Defenses Against Breach of Contract
If you’re sued for breach of contract, you can fight back. Your business attorney may use one of the following arguments to defend you against the allegation:
- The contract is not valid because the plaintiff deliberately neglected to disclose vital information or made a false statement.
- The defendant was compelled to sign the contract by threats, physical force, or undue influence of the plaintiff.
- Both parties made mistakes in the contract.
- The statute of limitations for initiating an action has expired.
If your attorney can present convincing evidence of any of these defenses, the contract may be thrown out as invalid.
What Damages Can Business Litigation Plaintiffs Recover?
The types and amount of compensation available to a plaintiff in business litigation, if any, can vary according to the facts of the individual situation.
The most common types of damages awarded in a business case are:
- Compensatory damages. The defendant pays the plaintiff money that covers any actual, provable loss. Ideally, that should leave the plaintiff in a similar financial position as if the loss had never occurred. Damages awarded could include what the plaintiff lost from income and profits.
- Reliance damages. When the loss is more difficult to define financially, reliance damages cover situations where the defendant failed to act on an obligation, or when the plaintiffs detrimentally relied on misrepresentations by the defendant.
- Restitution damages. These are sometimes awarded in breach of contract cases when a promised benefit is not delivered. The plaintiff receives compensation for the value of what the defendant received while waiting for the defendant to honor contracted promises.
- Liquidated damages. Contracts sometimes spell out what costs each party should pay if one or the other failed to honor the agreement. If liquidated damages do not indicate actual damages, the court may instead award a different and more accurate type of financial compensation.
- Punitive damages. Occasionally a plaintiff will recover punitive damages when a defendant has engaged in deliberate activity against the plaintiff to cause harm.
Most individuals work hard to create and grow their businesses, and when there are disputes or disagreements, it is very stressful.
At Mendes Weed, LLP, we can work with you to try to plan and prevent disputes, but we are also here to help you and give you peace of mind when an actual dispute arises. We will advocate zealously for you and your business.
California Tax Law Specialist
Partner Christina Weed has years of experience helping businesses and individuals with their complex California tax litigation issues. She is a licensed attorney with an LL.M. in Taxation from the University of San Diego and a Bachelor’s Degree in Accountancy. She serves as Chair of the Tax Section of the Contra Costa County Bar Association and is also a member of the Estate Planning Council Diablo Valley and the Tri-Valley Estate Planning Council.
In 2018, Christina became one of the first lawyers to argue a case in front of California’s Office of Tax Appeals.
Christina has been designated a Certified Specialist in Taxation by the State Bar of California.
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