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Breach of Contract — Was There a Contract?

On Behalf of | Dec 29, 2017 | Breach Of Contract

Buffington Law Firm’s experienced team of breach of contract litigation attorneys have often brought, or defended against, breach of contract claims. Often these claims seem straightforward — there was an agreement, perhaps even a written agreement, and one side failed to carry out his or her side of the bargain.  However, sometimes it is more complicated than that.  One of the threshold questions must always be the question as to whether there was actually a contract between the parties.

California Civil Code Section 1550 states that it is essential to the existence of a contract that there should be:

1.  Parties capable of contracting;

2.  Their consent;

3.  A lawful object; and 

4.  A sufficient cause or consideration.

Breach of contract attorneys must review each of these elements when planning to bring or defend against a breach of contract claim.  Of particular interest is element 4: consideration.  This essentially means that for a valid, enforceable contract to exist, both sides must be giving up something to the other.  This may seem obvious, but often it is not.  Buffington Law Firm’s breach of contract attorneys recently successfully defended against a multi-million dollar written contract claim on the basis that the alleged “contract” lacked consideration.  The contract required one side to give up a valuable asset, but it did not specify what, if anything, the Plaintiff was required to do in exchange for receiving this asset.  The written document did recite alleged wonderful things that the Plaintiff had done for the other party in the past.  However, under California law and common law, past consideration is no consideration.  What the law looks for is what attorneys often call “bargained-for exchange” — the notion that in entering the contract both sides agree, as part of the contract, that they will give something up to the benefit of the other party.  The jury found that in this instance there was no bargained-for exchange, and it found that accordingly, there was no breach of written contract that the Plaintiff could enforce in order to receive damages.  

Thus, in the above lawsuit, the dispute failed to pass the first test of a breach of contract claim: the question as to whether there was an actual contract for the law to enforce.  Unfortunately, the resolution of this dispute took two years and a four week jury trial to resolve, illustrating the point that these issues are often far from simple.

If you have a breach of contract legal issue, we invite you to contact Buffington Law Firm’s experienced team of breach of contract attorneys for a free legal consultation.  There is never a charge for this, and you will speak to an actual attorney in a confidential consultation.