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Being Sued for a Breach of Contract? What Can You Do?

Contracts play a crucial role in business transactions, and in an ideal scenario, both parties involved would reap benefits from the agreement without any conflicts. Nevertheless, unanticipated events like delays, financial difficulties, pandemics, among others, can arise and impede a party from carrying out its obligations or fulfilling the commitments outlined in the contract, potentially leading to a breach of contract. If you are facing legal action for breaching a contract, what steps should you take?

Under Nevada law, the party that believes a breach has occurred, has the right to initiate legal proceedings to recover damages resulting from a breach of contract. To pursue a claim for compensation, they must substantiate that the breach occurred and demonstrate the nature and magnitude of the damages incurred as a result of the breach. 

If you or your business is being sued for a breach of contract you should consider contacting a local business attorney. Our Reno-Based business attorneys can offer you the support and guidance you need to combat any allegations against you or your business. Any form of litigation can be harmful towards your business and future earnings. The course of action that can save you the most money long-term is combating this type of litigation early-on. 

The Best Offense Is A Good Defense

Winning a contract court case is best done by having good contracts in place. However, we know that hindsight is 20-20. Nevada law creates 4 basic elements for contracts to be enforceable. These are:

  • An Offer
  • Offer Acceptance
  • Meeting Of The Minds
  • Consideration

So, if your contract did not have these provisions then being sued for a breach of contract could be invalid. 

Damages Someone can seek in a Breach Of Contract Suit

If a party breaches a contract in Nevada, the other party may choose to initiate legal proceedings to claim compensation. However, the claimant seeking damages must furnish concrete evidence that the breach did, in fact, take place.

Usually, in breach of contract suits, the complainant seeks compensation in the form of monetary damages. Compensatory damages, as they are known, seek to reimburse the plaintiff for the genuine financial losses they sustained. 

Expectation Damages:

Expectation damages represent the sum of money or the value of goods that the complainant was anticipating to receive had the defendant fulfilled the conditions of the contract. The complainant can rely on the contract provisions or the market value of the pledged products or services to determine this value. In essence, the goal of expectation damages is to make the plaintiff “whole” again by compensating them for the loss they have suffered due to the defendant’s breach of contract.

To determine the amount of damages, the plaintiff can rely on various factors, such as the terms of the contract, the market value of the promised goods or services, and any other relevant considerations. For instance, if the plaintiff had entered into a contract to purchase a specific product at a certain price, and the defendant breached the contract by failing to deliver the product, the plaintiff may be entitled to expectation damages equal to the market value of the product at the time of breach, minus the amount that the plaintiff would have paid under the contract.

Consequential Damages:

Consequential damages can be sought by the non-breaching party seeking compensation for the harm caused due to the alleged breach. Consequential damages pertain to indirect or secondary losses incurred due to the breach. Calculating consequential damages can be intricate as it necessitates speculation about the hypothetical outcome had the breach not occurred. Hence, to recover consequential damages, the plaintiff must establish that the losses were foreseeable and directly arose from the breach.

Proving consequential damages can be onerous as the plaintiff must establish a causal relationship between the breach and the losses incurred. Additionally, supporting documentation such as income or sales records must back the plaintiff’s claim for damages. Courts would usually require plaintiffs to provide evidence to substantiate their claim for consequential damages.

How a Business Litigation Attorney Can Help

When running a business, there are always risks involved, and sometimes those risks can lead to legal disputes. Facing a lawsuit or allegations of breaching a contract as a business owner can be daunting. However, with the help of an experienced and strong business attorney, you can fight against these accusations and protect their business.

As we mentioned above, the strongest offense is a strong defense. Any business needs a periodic review of all their contracts. Having flimsy contracts, or no contracts at all, can inevitably lead to lawsuits, less profit, and the opportunity to get ‘burned’ by others. 

However, even with contracts in place, there is still the chance of a lawsuit being brought against you or your business. If this happens, our contract litigation attorneys can review the terms of the suit, the contracts in place, and all possible legal avenues

Sierra Crest Business Law Group has provided legal representation to several small business owners in commercial disputes. Our expertise includes litigating and defending claims of unfair competition, breach of contract, and equitable relief. If you find yourself fighting against these allegations or if you’ve been served a lawsuit, give our office a call to seek the help you need