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My Contract has Been Breached – Do I Have to Perform my Promises?

California Civil Code Section 1440 provides, “[i]f a party to an obligation gives notice to another, before the latter is in default, that he will not perform the same upon his part, and does not retract such notice before the time at which performance upon his part is due, such other party is entitled to enforce the obligation without previously performing or offering to perform any conditions upon his part in favor of the former party.” [Emphasis added.] As the court stated in Brown v. Grimes (2011) 192 Cal.App.4th 265, 277–278, 120 Cal.Rptr.3d 893 “[w]hen a party’s failure to perform a contractual obligation constitutes a material breach of the contract, the other party may be discharged from its duty to perform under the contract. Normally the question of whether a breach of an obligation is a material breach, so as to excuse performance by the other party, is a question of fact. Whether a partial breach of a contract is material depends on ‘the importance or seriousness thereof and the probability of the injured party getting substantial performance.’ ‘A material breach of one aspect of a contract generally constitutes a material breach of the whole contract.’”

Before any plaintiff in a breach of contract action can establish that a breach of the contract has occurred it must prove by a preponderance of the evidence that it has performed all of the obligations it was required to perform, or that its performance was excused. See California Civil Jury Instructions (CACI) Instruction 303. Breach of Contract – Essential Factual Elements, which states, in pertinent part: “2. That [name of plaintiff] did all, or substantially all, of the significant things that the contract required [him/her/it] to do [or that [he/she/it] was excused from doing those things]….” If the plaintiff fails to prove this essential element of his cause of action for breach of contract, neither a court nor jury can award any damages for the alleged breach and the defendant will not be held liable for its failure to perform.

While the performance of one party to a contract may be excused if the other party fails to perform, the determination of whether performance has occurred can be complicated. One should never simply assume that a breach has occurred without speaking with an experienced attorney. Even where a breach has occurred, an attorney may be able to help the parties to an agreement to resolve any differences that arise during the course of their dealings without the necessity of involving the courts.

To understand the laws, rules, and regulations which will enable you to make informed decisions about your company, and how best to do business in California, you need the services of an attorney uniquely qualified to give you that advice. Michael Leonard, Esq. of San Diego Corporate Law, named “Best of the Bar” for 2016 by the San Diego Business Journal, is that attorney. To schedule a consultation with Mr. Leonard to discuss any business-related matter, you can contact him by visiting San Diego Corporate Law or by telephone at (858) 483-9200.

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Schedule a Consultation: 858.483.9200