Breach of Contract
A breach of contract in legal terms amounts to a broken promise to do or not do an act. Breaches of a contract are single, occurring at a single point in time, or continuing breaches. A lawsuit for breach of contract is a civil action and the remedies awarded are designed to place the injured party in the position they would be in if not for the breach. Remedies for contractual breaches are not designed to punish the breaching party. A contract is a legally enforceable promise, either made in writing or orally. However, certain promises must be reduced to writing in order to satisfy the Statute of Frauds, a rule of substantive law, not a rule of evidence, that specifies certain subjects that must be evidenced by a written instrument.
The non-breaching party is relieved of his obligations under the contract by the other party's breach. Courts will award damages in the event of a breach, but the intent is not to punish the breaching party, but rather to put the other party in the position they would occupy if the contract had been fulfilled. In cases where money is inadequate to compensate the aggrieved party, the court may award specific performance to force the breaching party to fulfill the terms of the contract.
Material breach is a contract law term which refers to a failure of performance under the contract which is significant enough to give the aggrieved party the right to sue for breach of contract. When there has been a material breach, the aggrieved party is also relieved of a duty of further performance under the contract. However, a minor divergence from the terms of the contract is not a material breach. A material breach is one that is significant enough to destroy the value of the contract.
A lawsuit for material breach of contract is a civil action and the remedies awarded are designed to place the injured party in the position they would be in if not for the breach. Remedies for contractual breaches are not designed to punish the breaching party.
The following circumstances are important to determine whether a failure to render or to offer performance is material:
1. The extent to which the injured party shall be deprived of the benefit or profit which s/he reasonably expected;
2. The extent to which the injured party can be adequately remedied or compensated for the part of that benefit of which s/he shall be deprived;
3. The extent to which the party failing to perform or to offer to perform shall suffer forfeiture;
4. The likelihood that the party failing to perform or to offer to perform shall correct such failure, taking account of all the circumstances including any reasonable assurances; and
5. The extent to which the behavior of the party failing to perform or to offer to perform is according to the standards of good faith and fair dealing.
A Partial Breach
The failure to meet a term of a contract which is so minimal that it does not cause the contract to fail or justify breach (breaking the contract) by the other contracting party. A partial breach can be remedied (made up) by a small reduction in payment or other adjustment
A non-material or “minor” breach
A failure to perform a duty that only involves minor details which do not affect the whole outcome of the contract. It usually considered to be less serious than a material breach.
For use by a buyer’s agent when nearing close of escrow, and it is apparent that the seller has not complied with his or her contractual obligations. The letter demands compliance and states that the buyer may have a right to cancel should the seller’s breach be material. But failing compliance, the letter reserves the right of the buyer to close and recover damages at a later time. This letter can be used in conjunction with CAR Forms “Notice to Seller to Perform” (Form NSP) and “Verification of Property Condition” (Form VP)
NOTE: Send to Seller's Agent
[Seller’s Name]
It has come to the attention of the buyer that you have not performed or are refusing to perform in accordance with the terms of the Agreement.
Specifically you have failed to:
□ Make repairs as agreed to in writing. Note that “repairs” include any alterations, replacements, modifications, pest control work or retro-fit requirements. Furthermore, paragraph 15 requires that the repairs be performed in a good and skillful manner; that the work complies with applicable law, including governmental permit; and that the seller provide receipts and statements. (□ A completed Verification of Property Condition (form VP) is herein attached). The omitted repairs are as follows: __________________________________________________________________________________________________________________________________________________________________
□ Maintain the property in substantially the same condition as of the date of acceptance per paragraphs 9 and 16, including the pool, spa and all landscaping. (□ A completed Verification of Property Condition (form VP) is herein attached). The contract further requires the seller to remove all debris by close and in general maintain the property’s cleanliness. The property has sustained damage which has not been repaired as follows: _______________________________________________________________________________________________________________________________
□ Return personal property items or fixtures included in the sale per paragraph 8: ________________________________________________________________________________
□ Deliver disclosures, inspections or reports as follows (□ ”Notice to Seller to Perform” (form NSP) is herein attached) : _________________________________________________________________________________
________________________________________________________________________________
□ Deliver property vacant within 5 days of closing (if tenant-occupied) per paragraph 5.
□ Pay or deliver to escrow money owed as follows (specify amount and reason why seller owes money): _________________________________________________________________________________
□ Meet any other obligation of the Agreement as follows: _________________________________________________________________________________ _________________________________________________________________________________
If you are not already fully aware of the above defects in performance, Buyer hereby apprises you of such. Buyer further demands that you comply with the terms of the Agreement and perform as required. If you do not perform, and your breach is material, the buyer may be entitled to cancel the Agreement.
If you have failed to provide buyer with required disclosures or reports, the buyer may additionally be able to delay removing an applicable contingency.
In specifying his objections to the money, instrument, or property, Buyer is not waiving his right to object afterward. Buyer hereby reserves his rights to fully perform his obligations under the Agreement, close escrow and recover damages or request other legal remedies at a later time. Should you fail to fulfill your obligations under this agreement, I will have no choice but to recommend that my buyer consult with an attorney regarding his legal rights.
Sincerely,
[Name]
[Title]
It has come to the attention of the buyer that you have not performed or are refusing to perform in accordance with the terms of the Agreement.
Specifically you have failed to:
□ Make repairs as agreed to in writing. Note that “repairs” include any alterations, replacements, modifications, pest control work or retro-fit requirements. Furthermore, paragraph 15 requires that the repairs be performed in a good and skillful manner; that the work complies with applicable law, including governmental permit; and that the seller provide receipts and statements. (□ A completed Verification of Property Condition (form VP) is herein attached). The omitted repairs are as follows: __________________________________________________________________________________________________________________________________________________________________
□ Maintain the property in substantially the same condition as of the date of acceptance per paragraphs 9 and 16, including the pool, spa and all landscaping. (□ A completed Verification of Property Condition (form VP) is herein attached). The contract further requires the seller to remove all debris by close and in general maintain the property’s cleanliness. The property has sustained damage which has not been repaired as follows: _______________________________________________________________________________________________________________________________
□ Return personal property items or fixtures included in the sale per paragraph 8: ________________________________________________________________________________
□ Deliver disclosures, inspections or reports as follows (□ ”Notice to Seller to Perform” (form NSP) is herein attached) : _________________________________________________________________________________
________________________________________________________________________________
□ Deliver property vacant within 5 days of closing (if tenant-occupied) per paragraph 5.
□ Pay or deliver to escrow money owed as follows (specify amount and reason why seller owes money): _________________________________________________________________________________
□ Meet any other obligation of the Agreement as follows: _________________________________________________________________________________ _________________________________________________________________________________
If you are not already fully aware of the above defects in performance, Buyer hereby apprises you of such. Buyer further demands that you comply with the terms of the Agreement and perform as required. If you do not perform, and your breach is material, the buyer may be entitled to cancel the Agreement.
If you have failed to provide buyer with required disclosures or reports, the buyer may additionally be able to delay removing an applicable contingency.
In specifying his objections to the money, instrument, or property, Buyer is not waiving his right to object afterward. Buyer hereby reserves his rights to fully perform his obligations under the Agreement, close escrow and recover damages or request other legal remedies at a later time. Should you fail to fulfill your obligations under this agreement, I will have no choice but to recommend that my buyer consult with an attorney regarding his legal rights.
Sincerely,
[Name]
[Title]
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