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Breach of Contract

Breach of Contract

A contract is an agreement between two or more parties that creates an obligation to do or not do something. A breach of contract is the existence of an agreement or bargained-for exchange where one of the parties fails, without a legally valid excuse, to live up to his or her responsibilities under the contract.

A breach of contract usually occurs by one or more of the parties in one of the following ways:

  • Failing to perform as promised.
  • Making it impossible for the other party to perform.
  • Making it known there is an intention not to perform.

A contract may be breached in whole or in part.

Statute of Frauds

It is always best, although not always required, to have a contract in writing. Nearly all states have a law called the Statute of Frauds that lists the types of contracts that must be in writing to be enforceable. The purpose of these laws is to prevent fraudulent claims from arising. Although Statute of Frauds laws will vary from state to state, the most common examples of contracts that must be in writing are:

  • Sales of real property.
  • Promises to pay someone else's debt.
  • A contract that takes longer than one year to complete.
  • Property leases for more than one year.
  • Contracts for more than a certain amount of money, the amount of which is set by the state.
  • A contract that will go beyond the lifetime of the one performing the contract.
  • The transfer of property upon the death of the party performing the contract.

If you orally agree to one of the types of contracts listed above or one listed in your state's Statute of Frauds and do not memorialize the contract in writing, the contract will not be enforceable.

Statute of Limitations

If you sue for breach of contract, you must sue within the statute of limitations. Statutes of limitations are laws that set the deadline or maximum period of time within which a lawsuit or claim may be filed. The deadlines vary depending on the circumstances of the case, and the type of case or claim. The periods of time also vary from state to state and vary depending on whether filed in federal or state court. If a lawsuit or claim is not filed before the statutory deadline, the right to sue or file a lawsuit or claim is barred. Under certain circumstances, a statute of limitations will be extended beyond its deadline.