Types of Contract Breaches

There’s only one type of breach of contract. But there are many types of actions that constitute a breach of contract.

My internet marketing consultant told me that there was a lot of interest in a post on “types of breach of contract” and that I should write about this topic.

At first, I balked at writing such an article, because, in reality, there’s only one type of breach of contract. But, because a lot of readers are interested in the topic, I’ll discuss it. First, I’ll describe what the one type of breach of contract is. Then, I will list some recent breach of contract cases filed in Washington County, so that you can see what types of behavior often lead to breach of contract lawsuits.

The one type of breach of contract

To create a contract, the following elements are necessary: offer, acceptance, and consideration.

Offer: An offer occurs when one person shows a desire to go into a bargain, in a way that another person will believe that the offeror is inviting him to go into the bargain.

Example: If I tell a client, “I will handle your case if you pay me a $1,500 retainer”, I am making an offer to my client.

Acceptance: An acceptance occurs when an offeree agrees to the terms of an offer in the way that the offeror specifies will constitute agreement.

Example: If, in response to the above-described offer, my client says, “I would like you to handle my case” and my client then pays me a $1,500 retainer, then my client has accepted my offer.

Consideration: Consideration has two elements: 1) a bargained-for exchange between the parties, and 2) the exchange must be of “legal value”; that is, the exchange must constitute a benefit to the promisor or a detriment to the promise. Example: In the above-mentioned contract, my client gives me $1,500. That’s a benefit to me, and a detriment to my client. I then agree to perform work on my client’s case. That’s a detriment to me, and it’s a benefit to my client. Thus, my client and I have a contract.

A Contract Usually Does Not Need to Be in Writing

In Oklahoma, a contract does not need to be in writing unless the contract:

1)    Is not to be performed within one year of making the contract

2)    Is a promise to answer for the debt of another

3)    Is made in consideration of marriage

4)    Is for the lease of real property for more than a year, or

5)    Is for the sale of real property.

Breach of contract

One of the textbooks I studied in law school describes a breach of contract this way: “If it is found that (i) the promisor is under an absolute duty to perform, and (ii) this absolute duty of performance has not been discharged, then this failure to perform in accordance with contractual terms will amount to a breach of contract.” Example: Suppose a client pays me a $1,500 retainer, and I agree to handle his case. But then I take my client’s money and don’t do anything on my client’s case. I was under an absolute duty to perform, my duty to perform has not been discharged, and I failed to perform in accordance with the contractual terms. I’ve breached the contract.

That’s the only type of breach of contract. But breach of contract occurs in many different types of cases.

Types of breach of contract cases

Below, I describe a number of breach of contract cases recently filed in Washington County. Although the same definition of breach of contract applies to all of the cases, the situation is different. The cases discussed below will give you an idea of what types of behavior lead to breach of contract suits.

·         A homeowner did not make his mortgage payments, and the lender filed a foreclosure suit.

·         Plaintiff, a business owner, entered into a contract with Defendant. Under the contract, Defendant would maintain the daily operations of the business and pay the business’ bills. Defendant did not maintain daily operations of the business, and did not pay the business’ bills.

·         A human resources firm provided off-site human resources services to Defendant. Defendant never paid for those services.

·         Defendant entered into a lease agreement where Plaintiff would lease property to Defendant. Defendant never paid.

·         Defendant did not pay for labor and materials for Plaintiff to extract water and provide repair, remodeling, and remediation services to Defendant’s residence.

·         Defendant owed a bank as a result of charges made by Defendant on Defendant’s bank account. Defendant did not pay.

·         Defendant defaulted on his car loan.

·         Defendant didn’t pay her credit card bill.

·         Defendant, a business, borrowed money from a bank; Defendant did not pay back the loan.

·         Plaintiff had an automobile insurance contract with her insurance company. Plaintiff was injured in a car wreck, and the insurance company did not pay.

·         Defendants agreed to sell Defendants’ home to Plaintiffs. Plaintiffs paid the down payment as required by the contract, but Defendants refused to allow a home inspection or an appraisal, and refused to have the closing done by a professional closing company.

·         Defendant purchased a trailer located on Plaintiff’s property. Defendant also worked for a trucking company Plaintiff started. Plaintiff loaned money to Defendant. Defendant refused to repay his loans. Defendant converted the trucking company that Plaintiff started into Defendant’s own company.

·         Defendant failed to pay on a promissory note due to a bank.

·         Defendant leased a powder coat booth from Plaintiff, and did not pay Plaintiff

·         Plaintiff leased equipment (including lathes and forklifts) to Defendant. Defendant failed to pay.

·         Defendants contracted to perform labor on Plaintiffs’ home. Plaintiffs paid Defendants, but Defendants failed to do most of the work.

·         Plaintiff filed an earlier lawsuit against Defendant. Plaintiff and Defendant entered into a settlement agreement to settle the lawsuit. Defendant did not comply with the settlement agreement, and Plaintiff is suing Defendant for failing a comply with the settlement agreement.

Do you have a breach of contract issue? Contact the Persaud Law Office

At the Persaud Law Office, we’ve helped many people navigate the complexities of contract law. We’ve represented Plaintiffs who have sued others for breach of contract, and we’ve also represented people who have been sued for breach of contract. If you need our assistance with a contract case, we’d be happy to help. Give us a call today.