If you try to handle a contract dispute as a layperson, you’ll probably just be guessing at how courts normally interpret complicated contractual issues. You will also be unable to easily navigate local court rules and the rules of civil procedure. These are challenging for even experienced attorneys who use them on a regular basis. While you are certainly free to conduct your own informal legal research on the Internet, only an experienced, practicing lawyer can guide you through the different stages of negotiating contractual disputes with another party. Likewise, all lawsuits and arbitration proceedings require highly trained professionals to present legal matters in the best possible light for the respective parties.
Always remember that it’s best to handle this type of serious matter with the help of a barlicensed attorney who has handled similar contractual conflicts in the past. A lawyer with no experience with breach of contract cases may not know what they are doing and will be less helpful than a lawyer who has dealt with similar situations.
It is quite possible that you breached the contract on purpose. It may be cheaper to pay the damages for breaching the contract than fulfilling its original terms. If you breached on purpose your primary goal will be to reduce the amount of damages you have to pay under the contract. Although it’s possible that you only entered into an “oral contract,” those are fairly rare today. Most states have now passed laws which require all contracts to be in writing when the goods or services involved are worth $500 or more. Written contracts are always preferable because they allow you to detail how each party must uphold its duties and how both sides should respond if any disagreements or disputes arise.
Once you get a demand letter, the ball is in your court. It’s then up to you and your attorney to decide how to respond to it. Make sure that the demand letter, if you have received one, complies with state law. Many states require that a pre-lawsuit letter is sent, in order to increase the chance of out-of-court settlement.
There are scam artists who do send out such mail, in the hopes that you will accidentally provide critical personal or business information that can be used for identity theft purposes. If you don’t know the individual or company contacting you, there’s obviously no need to respond. If you’re certain that the letter is legitimate, only provide the least amount of necessary information, in keeping with your lawyer’s advice.
Keep in mind that if you do provide an acceptable affirmative defense, you will still need to propose an agreeable way to “cure” the unavoidable breach. [2] X Research source
Remember to include notation of any errors included in the initial demand letter. Correct any factual errors but be sure to keep the tone calm and professional. Properly format your letter. Make the correspondence as professional as possible.
Misrepresentation or fraud. You could argue that misrepresentations were made during the contract negotiations, and therefore you would never have formed the contract but for the fraud. [5] X Research source Impossibility. You can argue that the contract cannot be performed because circumstances have changed. For example, it may no longer be possible to deliver goods if the goods were destroyed in a fire or storm. Unconscionability. You could allege that the terms of the contract are grossly unfair and that you only consented to the contract because of unequal bargaining power. [6] X Research source The statute of limitations has expired. Depending on your state, a breach of contract lawsuit will need to be brought within a certain number of years. If the lawsuit is filed after the deadline, then you can have the case dismissed.
If no form is available for your state, then you can use the plaintiff’s complaint as a template for your answer. Type the same header information into your blank word processing document. The header information includes the court name, the names of the parties, the judge hearing the case, and the case number. Under the heading, center the words “Answer to Complaint for Breach of Contract” in all caps and bolded. Then, in the body of your motion, you should admit, deny, or claim lack of knowledge with respect to every allegation in the complaint. Be sure to number your paragraphs and respond to only one factual allegation per paragraph. Then, you should include any affirmative defenses (statute of limitations, impossibility, etc. ) and state the facts that support your defenses. At the bottom, append a signature block and sign the motion. Also state how you are serving notice to the plaintiff, either by mail or by personal service, and state the date. You may not want to respond if you have no credible defense. In this case, you would simply suffer a default judgment, which you would then pay. Taking a default judgment can save you on time and attorney’s fees.
You will probably need to pay a filing fee. If you can’t afford the fee, ask the court clerk for a fee waiver form and fill it out. [8] X Research source Be sure to have the court clerk stamp every copy of your answer with the date.
If you have the answer served using the sheriff or a professional process server, then you will need to fill out a Proof of Service form. This form may go by a different name, such as an “Affidavit of Service. ” But the form serves the same purpose: to attest that the server made service on the plaintiff. You will have to attach this form to the copy of your answer that you want served. After service, the sheriff or server will sign it and then mail it back to you. You must then file it with the court as proof that you served your answer on the plaintiff. You will have to pay for service of process. Typically, a private process server costs between $45-75. [11] X Research source
If you appear in small claims court, then there may be limited, or no, discovery.
You should review all relevant documents: the contract, any correspondence with the other party, and any notes or internal memoranda that you may have made. This will refresh your memory so that you don’t say anything in the deposition that is patently untrue. You can also prepare for the deposition by having your attorney do a mock deposition, during which she peppers you with questions regarding the lawsuit. Sit for the deposition. The deposition will be held in an attorney’s office. In addition to attorneys, a court reporter will be present to record the questions and answers. To be effective during the deposition, remain calm and listen to the questions closely. Seek clarification if you do not understand a question. If you do not know an answer, then say, “I don’t know. ” Do not guess.
As a defendant, you can file a motion for summary judgment. Typically, you can argue that you are entitled to summary judgment because no valid contract exists or that no evidence of damages exist.
Of course, if the plaintiff is seeking a low amount of damages, you may want to settle anyways, to avoid expending the time and money going to trial. If you have a lawyer, you should always talk about potential settlement, and be open to settlement at any point in the litigation.
Your trial may take place in small claims court. Here, the rules are much more informal. You probably cannot even have an attorney represent you. [12] X Research source
After discussing it with your attorney, consider providing copies of documents related to your business contract to the other side if requested. However, instead your lawyer may advise you to go ahead and pursue either arbitration or a declaratory judgment action.
Dispute in the manner most favorable to your position. According to the American Bar Association, the main reason people file a declaratory judgment action is to “settle important questions of law before the controversy has reached a more critical stage. " While they are commonly used in many insurance law cases, you’ll see parties seek declaratory judgments in a wide variety of legal battles. Of course, the validity of your claim will largely determine whether or not this approach proves beneficial to you.
Arbitration offers unique advantages to you and the other party. It allows you to: (1) choose your arbitrator, (2) proceed immediately instead of waiting for a matter to appear on a court docket, and (3) handle the matter in an efficient yet often less formal manner. [13] X Research source Any constraints imposed upon handling disagreements through arbitration should already be clearly stated in your contract.
