Pennsylvania Breach of Contract Attorneys
There are three major elements required for a breach of contract action in Pennsylvania:
- a valid, enforceable contract must exist;
- there must be a breach of a duty imposed by that contract;
- and this breach results in damages.
First, there must be a valid and enforceable contract.
A contract requires consideration to be valid. This means that both sides must surrender a legal right and obtain a benefit which they actually desire. Otherwise, there is no consideration and the agreement cannot be considered a binding contract.
Generally, a contract is valid whether it is made orally or in writing. However, certain types of contracts must be in writing. In those situations, courts will not enforce those contracts if the parties only agreed verbally and did not write anything down.
Second, there must be a breach of duty imposed by that contract.
Once the existence of a valid contract has been established, it must be shown that one of the parties breached, or failed to perform, a duty, or requirement, imposed on them by the contract.
“A party to a bilateral contract…breaches a contract when she fails to do something she expressly or impliedly agreed to do.” Johnson v. Finestra, Inc. (Construction Division), 305 F.2d 179, 181 (3d. Cir. 1965).
However, the breach must be material. That is, it must be significant enough to affect the contract or the performance of the contractual terms in a substantial way. There are no set criteria that automatically determine whether a breach is material, so there is no way to know beforehand whether a party’s breach will be considered material by a court.
Rather, the court may consider different factors in deciding whether a party’s actions constitute a material breach, namely:
- 1) The extent to which the other party will be deprived of the benefit she reasonably expected;
- 2) the extent to which the party that has failed to perform will suffer forfeiture; and
- 3) the extent to which the party that did not conform comported with standards of good faith and fair dealing.
Widmer Engineering, Inc. v. Dufalla, 827 A.2d 459, 468 (Pa. Super. 2003).
Third, you must be able to prove the damages occur from the breach.
Lastly, the party bringing the breach of contract action must establish that as a result of the breach it suffered damages.
1. Damages must be reasonably foreseeable – they must directly result from the breach and must be damages of a kind that the two parties could have predicted when they originally made the contract.
2. Damages should put the aggrieved party in the same position it would have been in had the contract been successfully completed.
3. Those damages must also be reasonably certain – if a party cannot prove how much money he would have gained had the breach not occurred, he cannot recover damages. The aggrieved party must also attempt to mitigate his damages by looking for alternatives to the breached contract.
A party can only recover damages in court if he has found no viable alternatives with which he could replace the benefit he would have gotten from the breached contract after taking reasonable steps to do so.
If all three of these requirements are met, then the aggrieved party will have a cause of action for breach of contract and may be able to recover damages in court.
If you think that a company you are contracted with has broken that contract, you may be entitled to collect damages
If another business has not honored its side of a contracted arrangement, contact Berkowitz Klein LLP today. Our experienced corporate and commercial litigation attorneys have been representing businesses in contract disputes in Chester County and across Pennsylvania for over 25 years.