Gardi, Haught, Fischer & Bhosale LTD.

When to Call a Contract Lawyer
By Thomas Haught

Contracts make the world go round, and unfortunately, when people don’t honor their contracts, it may be necessary to get a contract lawyer in Schaumburg involved.

Although you don’t realize it, we enter into contracts on a daily basis. I don’t necessarily mean contracts with fifty pages of single-spaced, small print contracts. The law recognizes many contracts beyond those.

For a contract to be valid, there are three simple elements that must be addressed:

The Offer, in which one of the parties agrees to do something (or not do something)
The Acceptance, or agreement with the offer is made.
The Consideration, in which something of value (money) is exchanged

If you have these three elements, the parties have come to what is known as a
“meeting of the minds” and a contract is formed. If, as part of your acceptance of an offer, you change a term of the offer, there is no longer a meeting of the minds and therefore, no contract. What you have actually done is rejected the offer and made a counteroffer.

To the surprise of many people, these elements of offer, consideration, and acceptance do not necessarily need to be in writing. Generally, oral agreements are as binding as those in writing. Of course, the best evidence of an agreement between parties is that the agreement is put into writing and acknowledged by both parties. Also, many laws dictate that certain contracts MUST be reduced to writing – such as for the sale/purchase of real estate.

So now the big question: what if one of the parties does not live up to their end of the
agreement? In contract law, that is known as breaching the contract. Of course, the contract lawyers in my Schaumburg office always recommend that the parties first try to work out a resolution before calling a contract lawyer and resorting to litigation. Sometimes, however, that’s just not possible and the party claiming the breach must file a lawsuit.

Three conditions must be met for a breach of contract lawsuit:

1. The wronged party claims that the parties have a contract.
2. The wronged party claims that the other party breached that contract.
3. The wronged party claims he/she has suffered damages as a result of the breach.

All three elements (a contract, a breach, and damages) must exist for a lawsuit. If a lawsuit is necessary, the contract lawyer will hope that the parties have reduced their agreement to writing. This will help avoid he said/she said situations and the judge can read the contract as a whole, to determine 1) the intentions of the parties when the contract was created; 2) determine if there has been a breach and 3) determine if damages have been suffered.

Generally, the non-breaching party seeks compensatory damages. These are the actual damages to cover the monetary loss that the party has suffered due to the breach.

In some cases, a party may also seek punitive damages. Those are damages meant to punish the wrongful acts of the breaching party. However, punitive damages are not commonly awarded and willful, malicious or fraudulent actions must be shown to merit such an award.

Finally, I think that it is important to note that the non-breaching party has an obligation to try to minimize the damages. This is known as mitigation. By way of example, if I contract with you to lease you an apartment for one year, and you breach the lease and leave the apartment after only one month, I cannot just sit around and leave the apartment empty for the next 11 months. That would not be reasonable. It would be reasonable for me to try to find a new tenant. And if I find a new tenant very quickly, who is paying equal or greater rent that you were paying, I have actually suffered no damages, and could not file a lawsuit, even though you have clearly breached our contract!

Contract law can be complicated and has nuances not addressed in this article. However, you now have a good understanding of the basic elements of contracts, the duties of the parties, the consequences of a breach, and most importantly, when to contact a contract lawyer.

If you ever find yourself in a contract situation where you think you may have a case, please don’t hesitate to contact the contract lawyers at Gardi, Haught, Fischer & Bhosale LTD in Schaumburg at 847-944-9400.

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