What Businesspeople Should Know About Breach of Contract Lawsuits
Ask a student in a college of business what led them to choose their field of study, and they will probably tell you about the exciting world of business and entrepreneurship that awaits them. They have probably heard successful entrepreneurs talk about closing a business deal that led to long-term financial stability for everyone involved. The deal may have been made in a conference room, a restaurant, or even a hotel bar, and it was sealed with a handshake, a gentlemen’s agreement. What old businessmen nostalgic for their deal-making days don’t tell you is that most handshake deals end up evaporating into thin air before the projects they entail come to fruition. Those same old businessmen, if you ask them, probably also have lots of stories about would-be business partners who never followed through on their promises. In some cases, people file lawsuits related to business agreements that disintegrated, but you only have a case if you have documents proving that the agreement existed in the first place. Business dispute lawsuits, including those related to breach of contract, succeed or fail on the strength of the documents involved.
What Is Breach of Contract?
Breach of contract is when one party to a contract does not do what they promised, in signing the contract, to do, and does not abide by its terms. “Contract” in this context, means “written agreement,” and “breach” means “break.” The following are some situations that might lead to a breach of contract lawsuit.
- An employer does not pay an employee the salary promised in the employment contract
- A vendor does not deliver the merchandise that they promised in a supply contract
- An employer does not provide the employee with the materials the employee needs to do their job, such as not providing a car for a delivery driver if the contract specified that one would be provided
It is possible to sue for breach of contract when the contract was made orally and not written down, but this is much harder to prove, and the statute of limitations for breach of an oral contract is one year.
How to Prove Breach of Contract
The good news is that breach of contract lawsuits have a long statute of limitations; you can file a breach of contract lawsuit up to 12 years after the breach took place. To win the lawsuit, though, you must prove that the person actually promised to do the things they did not do. Therefore, the contract must state, explicitly and in detail, all the obligations of each party. The best way to make sure that your contract does not have any loopholes is to have a lawyer draft it, or to draft it yourself and then have a lawyer review it before you sign it.
Let Us Help You Today
The best way to protect your rights in business is to put everything in writing. Having a business law attorney review your business agreements can help you avoid ambiguity and misunderstandings with your clients, employees, and anyone else with whom you conduct business. Contact the Washington DC business dispute attorneys at the office of Tobin, O’Connor, and Ewing for professional assistance.