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LITIGATION

Breach of Contract and Non-Performance in Arizona

A contract is a legally binding agreement between two parties, where one party offers to do something—for example, build a new house—and the other party accepts the offer and promises to do something in exchange—for example, pay money.

We deal with contracts regularly in our daily lives, as well as in a business context. Contracts in terms of consumers are used, for example, when:

Setting up a mobile phone plan
Renting an apartment
Engaging a plumber to do repairs
Buying a house
One business buys or merges with another
Hiring an employee
Taking a loan from a bank

Contracts in terms of businesses are used, for example, when:

Setting up a commercial lease
Entering into a licensing agreement
Entering into a purchase agreement
Hiring new employees or contractors
Creating any other type of business agreement, like partnership agreements, indemnity agreements, non-disclosure agreements, etc.

If one party fails to perform their obligations under an agreement without a reasonable excuse, the other party may be able to sue them for breach of contract. To do this, the contract must be valid—it must be legal and both parties must have the capacity to enter into it. A contract is also usually written, although a breach of contract can apply to a verbal agreement in certain situations. Where a party sues for breach of contract, the party that fails to perform their obligations is called the defendant and the wronged party is called the plaintiff.

Types of Breaches of Contract in Arizona

Not all breaches are alike, and as such, not all breaches may be resolved through litigation. The law categorizes breaches of contracts based on their seriousness and timing.

Material vs Minor Breach

Material breaches occur when a defendant fails to perform an important obligation under the contract and that causes the contract to be “irreparably broken.” A material breach makes it impossible for the other party to perform their obligations under the contract. Some contracts explicitly define a material breach of the agreement. If the contract is silent on the issue, a court looks at factors like whether or not the defendant acted in bad faith and whether the plaintiff can be compensated for their loss. An example of a material breach is when a buyer fails to pay for a product they received. In comparison, a minor breach does not materially disadvantage the other party and the contract can still be substantially performed. For example, the delivery of a product one day late does not go to the core of the agreement and is likely a minor breach.

Actual vs Anticipatory Breach

An actual breach occurs when one party fails to perform a term under the contract. Anticipatory breaches, on the other hand, occur when one party notifies the other that they will not comply with a term of the contract. This allows the other party to claim a breach of contract, even though it has not yet happened.

Remedies in Arizona for Breaches of Contract

Remedies exist to resolve contract breaches. What those remedies might be will depend on the facts and circumstances. More than one remedy may apply in your unique cases. Potential remedies for a breach of contract include but are not necessarily limited to:

Compensatory damages, which are the most common type of remedy for breach of contract, covering the actual loss caused to the non-breaching party – these damages can be viewed in terms of (1) expectation damages where the non-breaching party recovers monetary damages based on the contract itself or the market value; and (2) consequential damages where the non-breaching party recovers indirect damages for reasonably foreseeable harm resulting from the breach.
Punitive damages are the least common type of remedy for breach of contract but when awarded, are meant to punish the breaching party who acted fraudulently, maliciously, or willfully when breaching the contract and to prevent the same type of breaches in the future.
Specific performance, which is the result of a court order requiring a defendant to perform an obligation under the contract .
An injunction, which is a court order requiring a defendant not to do something, either temporarily or permanently.
Rescission, which occurs when the court cancels the parties' obligations under the contract so that, theoretically at least, they are in the same position as before the contract was made.
Restitution, which is a court order requiring the defendant to pay the plaintiff the amount agreed to in the contract – often involving the return of money or property .

Again, the remedies available in your case depend on the jurisdiction, type of breach, specific terms of the contract, and circumstances in which the contract was made.

Possible Defenses to Breaches of Contract: It is important to know the possible defenses a business or consumer may have when they breach a contract. If you are the party to breach the contract, make sure to speak with an attorney about how any one of these or other defenses may apply in your case. If you are the non-breaching party, knowing these defenses can help you understand how the other party may argue their case. This knowledge will provide insight on how to move forward to uphold the terms and conditions of the contract or to come to another resolution, even if that means litigation.

Defenses available to a party accused of breaching a contract include but are not limited to:

Fraud, where the plaintiff intentionally misrepresented material facts about the contract, making it fraudulent and therefore invalid.
Invalid contract, where the contract does not meet the criteria of a valid contract.
Duress, where the breaching party was forced to enter into the contract against their will.
Incapacity, where the breaching party did not have the necessary capacity to enter into the contract .in the first place – for example, because they were a minor at the time.
Unclean hands, where both parties are at fault for the breach of contract.
Mutual mistake, where the contract contains a mistake, different from what both parties intended.
Illegality, where the contract was an agreement to do something illegal – for example, commit a murder.

Regardless of whether you are the breaching or non-breaching party, you should speak to a contracts lawyer to see what defenses may apply or how those defenses may be used in your situation. A breach of contract lawyer in Arizona will assess the facts and circumstances and plan a strategy accordingly.

Contracts are legal instruments binding on the parties that enter into them. A breach of a real estate contract in Arizona can be particularly costly to the non-breaching party in a number of ways. The real estate market is hard enough when all parties play according to the rules. So, when the other party has breached the contract, making sure you get the remedies you need is critical.

Breaches of Real Estate Contracts in Arizona

A breach of contract occurs when a party to a contract does not fulfill its obligations under its terms. The potential for breaches is as many as there are damages. Making sure you satisfy the elements of the breach is a key first step to obtaining a proper remedy.

Property Rental Agreement Breaches

Breaches often occur in residential and commercial property rental agreements. These lawsuits result from breaches involving property usage, termination of the lease agreement, and the responsibility to make repairs.

Property Purchase Agreement Breaches

Property purchase agreement breaches are also frequently the subject of litigation. Buyers' remorse, disagreements over closing costs, and failure of the property to pass inspection are all reasons these types of breaches occur.

Elements Needed to Prove Breaches

The elements needed to prove a breach differ by jurisdiction, but there are four that you generally need to prove to be successful in a breach of contract lawsuit.

The existence of a valid contract.
Proof you performed your obligations under the terms of the contract or, alternatively, proof you were justified in not doing so.
Proof the defendant failed to perform their obligations under the terms of the contract.
Proof you suffered damages due to the defendant's breach.

These four elements are key to a successful breach of contract action.

Four Ways Real Estate Contracts in Arizona Are Breached

Listed below are the four main manners in which contracts are breached.

Minor Breach

A minor, or partial, breach occurs when one of the parties fails to follow through with a specific part of the contract although the other party did ultimately acquire what they were contracted to receive. Damages are hard to prove in a minor breach as financial losses are rarely experienced.

An example of a minor breach would be if a builder contracted to use a certain type of insulation in a home, and because that insulation was not available, used a very similar or even superior type of insulation. The minor breach occurred when the builder failed to use the specific insulation in the contract. The damages, however, were inconsequential and thus the remedy may only be nominal damages.

Actual Breach

An actual breach is when one of the parties, for whatever reason, does not fulfill some or all of their obligations under the contract.

An example would be if a seller of a home decided they no longer wanted to sell after signing a contract stating that they would. This breach is obviously a serious one and has the potential to cause significant damages to the party harmed by the breach.

Material Breach

A material breach occurs when one party to a contract ends up with something very different than what they contracted for. Damages are generally easy to prove in a material breach because one party definitely suffers a loss.

An example of a material breach would be if the parties agreed that the seller would put a new roof on a home before closing, but then the seller never follows through with that obligation. If the roof was bad and a severe storm swept through the area, you can imagine the damages that could be caused by this type of breach. Further, a new roof is an expensive but necessary endeavor. If the seller was contracted to do it, then it's an added cost for the buyer.

Anticipatory Breach

An anticipatory breach is when an actual breach has not yet occurred but is imminent. One party to the contract has indicated, either implicitly or through implied behavior, that they are not going to fulfill their obligations.

An example would be if a builder agreed to have a house completed by a certain date. Then, two weeks prior to that date, it turns out the builder has not yet even cleared the land where the house was to be built. The time delays alone are significant and can result in substantial damages, depending on the circumstances.

Remedies for Breach of Real Estate Contracts in Arizona

Remedies for breach of real estate contracts often depend on the damages suffered and the ability to place the damaged party in a favorable position. Listed below are some of the more popular remedies for a breach of a real estate contract.

Money Damages

Money damages are commonly sought by parties that have suffered a loss in a breach of a real estate contract. If it is a case where a buyer backs out of a purchase, the money damages could be the difference between the contract purchase price and the market value. The process to determine money damages varies according to the jurisdiction governing the real estate transaction.

Specific Performance

Specific performance is generally awarded when monetary damages are not enough to compensate for the breach. For example, if the property is located in a specific place and there is no other property that is comparable, a purchaser may seek specific performance. If the judge finds for the purchaser, the seller is required to go through with the sale of the property.

Liquidated Damages

Many contracts contain a provision known as liquidated damages. This is an agreed-upon amount indicating what the parties will accept as damages, in advance, in case the other party breaches the contract. Liquidated damages are not intended to be a form of punishment. A court can also determine that they are unenforceable, particularly when it is easy to calculate actual damages.

Termination

In some cases, the best remedy may be termination of the real estate contract. In such cases, the buyer is refunded the deposit and all expenses incurred during the failed transaction. These expenses may include but are not limited to attorney fees, survey fees, and title inspection.

Contact a Real Estate Attorney in Phoenix Today

If a party has breached a real estate contract, you should get immediate legal representation to protect your interests and mitigate damages. It is important to have a real estate attorney handle a breach of contract. These types of cases can be riddled with challenges, making a winning strategy hard to implement if you are unaware of all the potential risks and obstacles.

At RBC, our real estate lawyer in Phoenix will work with you to ensure you receive the remedy right for you or your business under the circumstances. Contact us today by filling out the online form or calling us at 4803328417 to schedule a Consultation.

Disputes in construction can arise across various projects, including commercial, public, home-building, and remodeling efforts, making it essential to be prepared. Below is a summary of common types of construction disputes that may occur.

Bid Protests . Bid protests involve challenges to the awarding of a construction contract based on allegations of unfair practices or procurement law violations. Reasons for bid protests frequently include claims of bid rigging, favoritism, and procedural errors during the bidding process.

Construction Defect Disputes. Disputes about construction defects surface when there are disagreements regarding the quality of work or materials used. Common issues include building code violations, water intrusion or mold problems, structural deficiencies, faulty workmanship, and the utilization of substandard materials.

Contractual Disputes . Contractual disputes occur when parties contest the terms of a construction contract, encompassing disagreements about wording, interpretation, and implementation. Examples include breach of contract, delayed payments, scope changes, and disputes regarding warranty provisions.

Design and Planning Disputes. These disputes arise from disagreements among the owner, architect, and contractor over project design and planning. Typical issues include disputes over specifications and blueprints, design errors, changes in scope, and disagreements on timelines.

Environmental Disputes. Environmental disputes occur when conflicts arise concerning a construction project's environmental impact. Examples include habitat destruction, water and air pollution, and noise disturbances.

Payment Disputes. Payment disputes are prevalent in construction and often arise from delays or issues with work performance. They may involve contractors, subcontractors, and suppliers and include non-payment, disagreement on amounts owed, extra work disputes, and lien or bond claims.

Professional Negligence. Allegations of errors or oversights by architects, engineers, or design professionals can lead to serious construction disputes. Common claims include design flaws and failure to meet industry standards.

Scheduling Disputes. Scheduling issues often occur due to delays or changes in the construction timetable. These can arise from changes in project scope, disagreements over proposed changes' impact, or performance issues related to weather or site conditions.

Termination Disputes. Conflicts over contract terminations, whether for cause or without cause, can arise, especially when breaches occur, or parties disagree.

Legal Options to Address Construction Disputes in Arizona.

Many construction disputes can be resolved without legal intervention, but others may require it. Options include direct negotiations, mediation, arbitration, and litigation.

Direct negotiations tend to be the most cost-effective and immediate method, allowing parties to either resolve the issues or pinpoint difficulties if unsuccessful. Mediation involves an impartial mediator to help facilitate dialogue, often required by courts during litigation.

Arbitration is a common resolution avenue in construction disputes, usually mandated by contract, and is akin to a trial but typically quicker and less expensive. Litigation involves filing a complaint in court, with the option for appeals if necessary.

Potential Remedies for Construction Disputes.

The resolution of construction disputes in Arizona typically results in at least one remedy to address the issue at hand, whether through clarification, restitution, or placing a harmed party in a better position. Monetary compensation may cover damages, with varying types depending on whether one is a contractor or owner, while specific performance may be ordered when monetary compensation is inadequate, especially in unique contract scenarios.

Given the complexities of construction disputes, it's essential to consult with a construction attorney to navigate the unique facts and circumstances of your case properly.

Overview of Civil Litigation

Civil law encompasses a wide range of legal principles and regulations that manage private disputes between individuals or entities. Civil litigation is the process undertaken by individuals to seek legal remedies for their grievances. Legal remedies can take several forms, including monetary damages or specific performance, among others.

Types of Legal Remedies:

Monetary Damages: These include compensation for economic (e.g., bodily injury, property damage) and non-economic (e.g., pain and suffering) losses.
Specific Performance: This remedy is ordered by a court when monetary damages are inadequate. It compels a party to fulfill a contractual promise.
Injunctive Relief: May include restraining orders, temporary or permanent injunctions, or specific performance to fulfill contractual obligations.
Punitive Damages: Awarded in cases of intentional misconduct or gross negligence to punish the defendant and deter similar behavior.
Declaratory Relief: Issued to clarify the legal rights or obligations of the parties involved in a dispute.

Common Causes of Civil Litigation:

Breach of Contract: Failure to fulfill the obligations in a legally binding contract.
Personal Injury: Accidents causing injuries due to negligence or intentional misconduct.
Property Damage: Disputes arising from damage to real estate or personal property.
Professional Malpractice: Negligence or misconduct by professionals (e.g., doctors, lawyers, accountants).
Business Disputes: Conflicts between businesses, such as partnership disputes or breaches of fiduciary duty.
Other causes include defamation, fraud, and assault and battery.

Civil Litigation Process:

Pre-litigation Phase: Initial investigation, evidence gathering, negotiation attempts, and drafting demand letters or initiating settlement discussions.
Filing the Complaint: The plaintiff files a written complaint outlining facts, legal claims, and requested remedies with the appropriate court.
Pleadings and Discovery: Exchange of pleadings (complaint, answer, counterclaims) and gathering of evidence through methods like interrogatories, depositions, and document requests.
Settlement Negotiation: Ongoing negotiations to resolve the dispute outside of court.
Trial and Judgment: If no settlement is reached, the case goes to trial where evidence and arguments are presented, and the court or jury issues a judgment.

Alternative Dispute Resolution (ADR):

Negotiation and Settlement: Direct negotiations can occur before or after a lawsuit is filed to reach an agreement without court involvement.
Mediation: A neutral third party assists in reaching a mutually acceptable resolution.
Arbitration: A neutral third party makes a binding decision after listening to both sides.

Importance of Legal Representation:

Navigating civil litigation alone (pro se) is generally not recommended due to the complexity of laws and procedures. A civil litigation attorney offers numerous benefits:

Legal Expertise: Specialized knowledge and experience in civil law and litigation.
Strategic Guidance: Assessing case merits, developing legal strategies, and guiding through the litigation process.
Evidence Gathering: Effective collection and presentation of evidence.
Negotiation Skills: Achieving favorable settlements while protecting client interests.
Courtroom Representation: Presenting arguments, examining witnesses, and advocating for the client's position if the case goes to trial.

RB&C LAW, PLC, is dedicated to providing top-tier legal representation for all civil litigation matters.