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Are breach-of-contract lawsuits common?

On Behalf of | Dec 9, 2022 | Business Law & Litigation

Business litigation is complicated, expensive and should be avoided where possible. Unfortunately, a large number of Sacramento, California, business litigation cases stem from contracts, which are everyday occurrences.

Everyday occurrences?

Yes. To make a contract, you simply need a bargain for exchange and consideration. In other words, two parties agree to give something up for something else. Everything you buy is a contract, and we contract with nearly every interaction, especially as business owners. This is why breach of contract cases are common in business litigation.


Essentially, a breach-of-contract case revolves around one party who did not live up to their end of the bargain. This could be that they failed to pay, deliver or did not do something else that was part of the contract. Especially during these times of supply chain issues, a common breach case is delayed delivery times and increased prices.

For example, if you had a contract with a Sacramento, California, sawmill to purchase lumber at a given rate, that sawmill might have trouble fulfilling that order in a few months or years ago as lumber prices have fluctuated drastically. Or, if your items are stuck on a boat that cannot find an open port to dock and unload in, your shipment from China could be delayed by weeks or months. Both can cause severe issues for businesses that rely on set prices and shipping times, especially as we are fully in the holiday season.

Justify litigation

Of course, in the United States, our courts are open to anyone for just about anything, but not all breach-of-contract cases warrant litigation. And, just because you have a good breach-of-contract case does not mean that it is worth anything in litigation. Generally, it comes down to two factors: materiality and damages.

Whether a breach-of-contract case is winnable comes down to whether the breach itself was material. Meaning, was the term that was in breach an essential part of the deal. For example, just because there is a noon delivery time written into the contract does not mean that delivering it at 1:00pm or 11:00am is a material breach. It must be stated that time is of the essence, or some other language indicating that the delivery time is a material term. So too could be any number of other clauses.

However, even if a term is material, and it was breached, it is only compensable if there are damages or an equitable resolution. In other words, if they delivered the item late, but you were not damaged, the northern California court cannot force delivery because it was delivered. And, it cannot award you money because you were not damaged.