Category: Contracts & Deadlines

Breach Of Contract: “Rescission” As A Remedy For Breach Of Contract

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Categories: business disputes, Continuing Series, contract law, Contracts & Deadlines, legal services

We lawyers at McGrath and Spielberger, PLLC deal with contracts every day. Unfortunately, that sometimes includes breaches of contract, whether due to a missed deadline or something else. Sometimes the breach is harmless, whilst other times it is devastating; most of the time the consequences are somewhere in between those 2 extremes.

A party who has been legally injured to the other party’s breach of contract (whether related to a missed deadline or not) can seek a “remedy”. Remedies are ways in which such an injury can be corrected or compensated for, and/or a way to enforce contractual rights.

One of the ways in which a wronged contractual party may be able to correct a legal injury is called “rescission”. Rescission generally attempts to put the parties back into the position they were in before the contract and breach of contract, with a focus on trying to undo (or compensate for) damages suffered by the party not in breach of contract.

For example, if the Seller under contract to sell real estate (real property) breaches the agreement by refusing to go forward and complete the sale, the would-be Buyer may have the right of rescission. This could include the right to recover any monies paid to Buyer or put into escrow (such as down payments, deposits, and good faith monies) and to be reimbursed by Buyer for actual costs expended or incurred (such as inspection fees).

Other terms and phrases often associated with rescission are to “unwind the contract” or “void the contract” and “make the parties whole”.

The “right of rescission” may be specifically stated in a legal agreement, but often is not. It is an established remedy which courts can order in appropriate circumstances.

It is rare that rescission is the only possible remedy available for an injured party, but sometimes a party may need to choose to seek rescission instead of another type of remedy.

As you may guess, rescission is not always possible or practical.

You may have the right to rescission and that may be the remedy you should seek. Parties who have been legally injured by a breach of contract should discuss their options with a lawyer and then determine the best route forward, which may or may not include the remedy of rescission.

Don’t hesitate to contact us for contract law services, such as drafting, editing, analyzing, negotiating, and disputes.

Breach Of Contract Remedies: The Other Party Breaches The Contract – What Can You Do?

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Categories: business, Continuing Series, Contracts & Deadlines

We lawyers at McGrath and Spielberger, PLLC deal with contracts every day. Most of those legal agreements have at least one time deadline, while some contracts have numerous deadlines.

Parties to contracts miss deadlines every day, and often those missed deadlines are a breach of the contract. Sometimes the breach of contract is harmless, whilst other times it is devastating; most of the time the consequences are somewhere in between those 2 extremes.

For discussion purposes, let’s assume the other party has missed a contractual deadline or otherwise breached the contract. What can you do – what are your “remedies” ? Keep in mind that what you can do may be quite different vs. what you should do (what you should do will be the topic of a separate article).

Typically, your remedies include any which are specifically stated in the contract and/or any which are generally available under the law. Some legal agreements specify what the remedies are (or may be) upon a breach of contract such as a missed deadline, while some do not. Contracts which do list specific remedies may state that the injured party only has that remedy, or may not have that restriction.

Here is a list of some (not all) of the more common and important ways in which a wronged contractual party may be able to correct legal injuries and/or enforce contractual rights; some of these may have their own linked articles which explain them in greater detail. The right to:

  1. be put back into the same position (or as close to it as possible) as you were in before the contract and the other party’s breach of contract (“rescission”);
  2. terminate the contract;
  3. not perform one’s own duties under the agreement (be careful with this);
  4. pay a lesser amount to the other party, if the contract involved paying the other party (be careful with this);
  5. recover actual monetary damages suffered due to the missed deadline;
  6. a pre-determined monetary amount as stated in the contract (“liquidated damages”);
  7. obtain a legal order which prevents the other party from doing something (an “injunction”);
  8. obtain a legal order which requires the other party to perform under the contract (“specific performance”); and
  9. recover certain legal costs and fees from the other party.

Sometimes, you can only utilize 1 of these remedies, whereas other times you can utilize more than 1. In a lawsuit, a party may initially seek more than 1 type of remedy, even if that party might, at trial, have to “elect which remedy / remedies” vs. continuing to pursue all of them.
It’s important to have a lawyer who has the experience and knowledge to guide you through your possible remedies for breach of contract. We have that experience and knowledge.
Don’t hesitate to contact us for contract law services, such as drafting, editing, analyzing, negotiating, and disputes such as those involving a breach of contract.

Contracts And Deadlines: Missing A Contractual Deadline

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Categories: Continuing Series, Contracts & Deadlines, partnership

We lawyers at McGrath and Spielberger, PLLC deal with contracts every day. Most of those legal agreements have at least one time deadline, while some contracts have numerous deadlines.

How often does a party to a contract miss a deadline stated in the agreement between the parties? It happens many times, every single day. What a party under contract can do and/or should do related to a missed deadline is impacted by many factors. Let’s examine some of the key factors, raised in the form of questions below.

  • Did you miss the deadline, or did another party to the contract?
    (For purposes of the remainder of this article, let’s operate as if the other party missed the deadline.)
  • Did the other party give you advanced notice that the deadline would be missed and/or a reasonable explanation as to why?
  • As discussed in another one of our articles, was the deadline stated in the contract to be one for which “time is of the essence”?
  • Is the fact of the missed deadline particularly important, including whether it has caused or is causing significant, measurable damages to you?
  • Have you provided formal, written notice of the missed deadline, perhaps including that the same is a breach of contract?
  • Is there a time period in the contract during which the other party can “cure” the problems caused by the missed deadline and/or cure a breach of contract?
  • Do you want – or need – the relationship with the other party to continue?
  • If significant damages have been caused, is there a way to fix that without the situation becoming adversarial, including without threat of a lawsuit or an actual lawsuit?
  • Does the missed deadline impact your duties under the legal agreement, possibly including whether you are still required to carry them out or the timing of doing so?
  • Does the contract specifically state what the consequences are or might be due to such a missed deadline, or perhaps due to a breach of contract in general?
  • Is the situation serious enough, potentially including the amount of damages caused, for you to retain (and pay) a lawyer?

The answers to these and other questions will play a crucial role in determining: (1) what you can do; and (2) what you should do. Your possible options are the subject of a related article by our law firm.

Don’t hesitate to contact our law firm for contract legal services, such as drafting, editing, analyzing, negotiating, and disputes.

Contracts And Deadlines: Time Is Of The Essence

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Categories: Continuing Series, contract, Contracts & Deadlines, legal services, Service Contracts

We lawyers at McGrath and Spielberger, PLLC deal with contracts every day. Most of those legal agreements have at least one deadline, while some contracts have numerous deadlines. A related article by us discusses types of contractual deadlines.

An important aspect of contractual deadlines is whether “time is of the essence”. Any deadlines, dates, time periods, etc. in a contract are more likely to be enforced very strictly if the agreement states that “time is of the essence” regarding same.

Let’s suppose a Service Provider has not completed the contractually-obligated Services within the required time frame, and let’s compare and contrast these 2 different versions of the deadline in the business contract.

(Version A) Service Provider shall complete the Services no later than 90 days after Company provides the Data.

vs.

(Version B) Service Provider shall complete the Services no later than 90 days after Company provides the Data, with time being of the essence.

The entire circumstances are always taken into account when applying the law or a legal agreement to the facts of a particular real world situation. However, generally, Version A is more likely to allow Service Provider a bit of leeway whilst Version B increases the chances that Service Provider would be deemed to be in “material breach” of contract for not meeting the deadline.

On the one hand, it seems logical that any deadline in a legally binding agreement should be considered to be a definitive deadline vs. a “target”. However, courts do (sometimes unofficially) take into account that “stuff happens” in real life and having a contract in place does not always mean a party is “punished” for lack of perfect compliance.

The more important the deadline, the more important it is for the party who needs the deadline (or benefits from it) to have “time is of the essence” in the contract for that deadline.

Professional deadline conceptual illustration showing stressed office workers and management with a sense of urgencyDon’t hesitate to contact us for contract law services, such as drafting, editing, analyzing, and/or negotiating.

Contracts And Deadlines: Types Of Legal Deadlines

Posted on by g83js92js91
Categories: Business Law & Contracts, Continuing Series, Contracts & Deadlines, Legal Profession

bigstock Deadline 91387712

We lawyers at McGrath and Spielberger, PLLC deal with contracts every day. Most of those legal agreements have at least one time deadline, while some contracts have numerous deadlines. Contracts, including business contracts, may have other legally important time periods which aren’t exactly a deadline.

An important aspect of contractual deadlines is whether “time is of the essence”. One of our attorneys will provide insight into that concept in a different article.

A wise approach to professional deadlines is “If it’s an important deadline, put it in the contract.” Keep in mind it’s a team approach; your attorney may not be able to know of a deadline which is specific to your circumstances. You always want to be proactive about sharing such information and helping to ensure it is covered in the contract.

Here are some common types of contractual deadlines.

  1. Services must be complete by a certain date.
  2. Product delivery deadlines.
  3. Payment due dates.
  4. Commercial landlord’s delivery of leased space and related deadlines such as Tenant’s open for business date. For examples:
    • Landlord shall deliver possession of the Premises to Tenant within 30 days of this Commercial Lease’s Effective Date; this is the “Delivery Date”.
    • Tenant must be open for business within 180 days of the Delivery Date; this is the “Open for Business Date”.
  5. Notice to terminate or renew deadlines. For examples:
    • Company must notify Service Provider at least 30 days before the end of this contract term if Company wishes to terminate the Agreement.
    • Business Affiliate shall provide written notice to Company at least 45 days before the end of the calendar year if Business Affiliate intends to renew the Agreement for another 1-year term, which would commence that forthcoming January 1.
  6. Cure of breach of contract. For example:
    • Upon notice from Owner to Contractor that Contractor is in material breach of this Agreement and what constitutes the breach(es), Contractor shall have 10 business days to cure the material breach(es).
  7. Conditional deadlines. For example:
    • Consultant must complete the Services within 120 days after Company provides Consultant with the Data.
  8. “Within a reasonable time” (period). Be careful with this one! For example:
    • Independent Contractor shall return all of Firm’s materials within a reasonable time after the contract with Firm ends.

Don’t hesitate to contact us for contract law services, such as drafting, editing, analyzing, and/or negotiating.