5 Questions - California Breach of Contract - The Law Offices of Andy I. Chen - YouTube

Channel: unknown

[20]
Hey everybody, it's Andy and welcome again to my office in Los Altos, California. I'm
[25]
an attorney licensed to practice law in California as well as New York and in
[28]
this video I'm gonna go over the five questions that I think you should be
[31]
prepared to answer if you're going to get involved in a breach of contract
[35]
case. Now specifically I'm going to talk about California because that's where I
[39]
am, but these questions I think are going to be general enough that even if you
[43]
don't live in California they are going to apply to you in one way or another. If
[49]
it doesn't really kind of hurt you, like if it doesn't kind of, you know, tax you, I
[52]
guess, go ahead and, you know, kind of come up with the answers to these questions
[56]
even though you don't live in California because I think the principles, like I
[60]
said, are general enough that, you know, they're going to help you organize your
[63]
case, they're going to help you find a lawyer sooner, etc, etc. So
[67]
anyway the, I guess, the concept of a contract probably is not going to really
[73]
excite a lot of you. You know, contract lawyers sort of aside, I guess, but if
[78]
you stop and think about it actually, contracts actually underlie a lot of
[81]
what daily life and kind of business kind of, you know, really involves. So if,
[87]
for instance, you're talking about a contract between two companies where, you
[90]
know, one company agrees to sell supplies to another, you know, and it's
[94]
worth, you know, tens or hundreds and millions of dollars. If it's a
[98]
situation where you're buying stuff on credit and there's a contract about how
[102]
you're supposed to pay, you know, when, how much, what the interest rate is, etc.
[105]
That's really important. If it's stuff where you're renting something, an
[110]
apartment, if you're renting a house, whatever, like you know, a variety of
[115]
scenarios basically, uh, involve a contract of some kind. A variety of scenarios in the
[119]
modern economy involve contracts of one kind or another.
[122]
So the breach of contract situation actually applies, er sorry, arises rather,
[127]
arises more often than you would sort of immediately think just by hearing the
[131]
word "contract." So hopefully that kind of made sense as a sort of background.
[136]
Breach of contract cases are actually quite common is the point I'm trying
[139]
to make. So, I guess, if if all of that sort of, you know, made sense, let's go
[144]
ahead and get started. So the first question that I would want
[147]
to know the answer to if I was interviewing a prospective client
[150]
basically would be is this agreement
[153]
that we're talking about, is this agreement
[155]
oral or written. Uh, and I think the reason for wanting to know the answer to that,
[160]
you know, should hopefully be obvious. A oral agreement that's just spoken
[165]
between two people obviously is going to be a lot harder to prove. You know, you
[170]
might have witnesses but, you know, you might, you know, the other guy to the
[173]
contract might have witnesses and maybe the witnesses contradict each other. You
[176]
might have recordings but, you know, the recordings could be subject to attack
[180]
also. A written document that, you know, is clear - ideally - if it's clear, specific, if
[188]
it's signed by the parties and dated and so forth, that's going to be a lot more
[192]
clear than, you know, a he-said, she-said, for instance, about what this oral agreement
[197]
supposedly was. And if you're talking about a written agreement actually, I
[201]
actually have a separate video on my channel about the Statute of Frauds in
[204]
California. I'm going to link that down below just in case you're interested.
[208]
Yeah, so anyway, the basic idea for question number one is is this oral or
[213]
is this written? What kind of agreement is this? Number two I've sort of alluded
[218]
to already and that basically is, depending on how you answer question
[221]
number one - oral or written - I guess, where is this document? If it's a written
[226]
agreement, do you have the document? Where is it? You know, do you have copies? Do you,
[232]
you know, is it signed, dated, etc? What like, where is this, is this document that
[236]
supposedly memorialized the agreement and also, for instance, you know, does it
[241]
comply with the Statute of Frauds, for instance? Number two, or I guess the
[245]
second way to answer number two, is if this is an oral agreement situation, what
[249]
proof do you have that there was an agreement at all? You know, do you have an
[253]
audio recording? Do you have emails after the fact that were just sent as
[258]
confirmation? Do you have witnesses? Do you have videotape? Whatever. Like
[262]
because an oral agreement is very hard to prove, what proof do you have of it?
[268]
Yeah, so that's basically question number two. Do you have the written
[272]
document, if this is a written agreement, or do you have proof that the oral
[276]
agreement said this, you know, actually existed, etc. So that's number two. Number
[281]
three is perhaps a little bit esoteric, I guess, a little bit sort of technical,
[287]
but number three basically is have you - you as the prospective party -
[292]
have you basically complied with everything you're supposed to do in this
[296]
contract or was your perform excused in some way? So, I guess, not a lot of
[302]
people know this - or not a lot of lawyers even know this - is that if you're trying
[306]
to sue for breach of contract, you yourself have to basically show that you
[310]
have done everything you're supposed to. You have performed under the contract.
[314]
You've complied with it. The other guy has not and, therefore, you're
[318]
you're suing for that. A lot of people try to actually sue the other guy, you
[322]
know, for breach of contract, when it's actually quite obvious, quite evident,
[326]
that they have not complied with the contract either. So, um, basically in
[330]
general, in order to sue for breach of contract, you have to show that you've
[333]
complied, you've performed, you have done everything perfectly. The other guy is
[337]
the jerk, the other guy is the one who's causing problems, etc. So depending on the
[344]
contract, you know, it is possible for you to actually prove that you've done
[348]
everything, it's actually possible to, you know, for you to do, to do your part. In, in
[352]
some situations, in some contracts it's actually not. So the thing is let's say,
[357]
for instance, that in order for you to do your part, the other guy needs to do his
[360]
part first, let's say, or let's say that the contract was so vague that, you know,
[365]
you, you had no idea what to do and you were trying to negotiate it or
[369]
something. So in certain contracts it is actually quite possible to show
[374]
definitively that yes, you have, you know, performed, you have complied, etc. In other
[379]
situations that might not be so easy to do that and that's kind of where you
[384]
know legal representation I think is going to be really helpful for you. So
[387]
that's number three: have you as the prospective, you know, the prospective
[392]
client, prospective party here, have you done everything you're supposed to or is
[396]
your performance excused in some way? Number four is sort of related, I guess,
[402]
to number three and number four basically is what was the other guy
[405]
supposed to do for you? You know, if this contract had actually been performed
[410]
properly, what was the other guy supposed to do? You know, was he supposed to sell
[415]
you a bunch of components at a really good price? Was he supposed to, you know,
[418]
pay on a certain schedule? Was he supposed to, you know, rent you this apartment? Rent you
[423]
this boat? Whatever. To have a good idea of what the contract was supposed to kind
[429]
of give you, I guess, that's actually really helpful to kind
[431]
of define the case, to help you, kind of, compute what the damages are, etc. So
[436]
hopefully, well again, it depends on the contract, but hopefully it's actually
[441]
really easy to kind of articulate or try to, to organize, to determine what exactly
[446]
this contract was supposed to do for you. So that's number four: what exactly were
[452]
you supposed to get? What was the other guy supposed to do for you, you know,
[456]
basically under this contract. Number five. Number five basically is going to
[461]
be what your damages are under this agreement. So, you know, if there was a
[465]
written contract and the other guy breached it, how much damage did that do
[469]
for you? Like what money would make it so that you are basically in the same
[472]
position you would have been in had this contract actually been performed? So this
[478]
gets into a little bit more of a discussion, I guess, because when you talk
[481]
about contract damages, there's actually several kinds. So one term which you
[485]
might kind of see or hear, you know, if you google it enough, I guess, is
[488]
"expectation damages." So that's something where if you were, like if you had a
[494]
contract that was supposed to give you a really good price on say a million
[498]
widgets or something and that contract was breached, then, you know, your damages
[503]
hopefully would be, okay whatever the difference in price that you had to pay
[506]
was multiplied by the million widgets. You might hear another term called
[510]
"consequential damages." Those are not real complicated, like they're not hard to kind
[516]
of explain. They might be a little weird to kind of think about because normal
[519]
people don't think about it. Consequential damages basically are
[522]
damages that you suffer as a consequence of the breach that on the surface might
[526]
not seem real obvious. In law school, how its taught basically is there's a case
[532]
called Hardesty is what I, you know, learned it in, but the basic idea, if you
[536]
can imagine, is like let's say that you are shipping something, you know, via UPS
[540]
or the mail - the US Postal Service - and you pay, you know, ten dollars to ship
[545]
this thing, but, you know, this thing that you're shipping actually is not just
[549]
worth ten dollars. It might be worth millions of dollars because it's
[553]
computer code, because it's, you know, some research
[557]
paper, because it's a patent or something and, you know, the value, you know,
[561]
basically is that, okay this patent if it arrives in time, this software code if it
[566]
arrives intact, that code or that patent is gonna be worth millions of dollars
[569]
and had, you know, if basically if UPS or the Postal Service loses it,
[574]
what are they basically in for? Are they, are they responsible for all the money
[578]
that you would have made from this software, from this patent, or are they
[581]
just responsible for, you know, the ten or fifteen dollars, or whatever it is that
[584]
they basically charged you to ship this thing? So, I guess, the consequential
[592]
damages part basically would be like, you know, is it kind of natural, foreseeable, I
[597]
guess, that this item that UPS is shipping for you really is worth
[601]
millions or billions of dollars? Yeah so hopefully that kind of made sense.
[605]
Consequential damages, you can google it. It's not terribly involved, despite how I,
[610]
despite how I've explained it, but yeah, that might be one type of damage
[615]
also. If you are in a situation where the other guy has breached, you might have
[621]
covering costs related to your, related to, you know, your mitigation
[625]
effort, let's say. That might be there also, that might be a component of your
[629]
damage also. A really good example of that I think would be if you're a
[633]
landlord and your tenant basically breaches, you know, his or her lease. Let's
[638]
say that, you know, they lose their job and they have to move out, you know, all
[641]
of a sudden, I guess, like even though you have a contract. If you have to
[645]
suddenly advertise for a new tenant, there might be some incidental, like
[650]
advertising sort of expenses, background check expenses, things like that, you know,
[654]
whatever expenses are associated with moving a new tenant into a place. Those
[658]
types of costs, incidental costs, maybe that's something you can recover also. So
[664]
those are basically the five types of questions that I think would be really
[669]
helpful for you if you have a breach of contract situation. You know, it'd be helpful if
[674]
you knew the answers to those. So to summarize again, to kind of recap.
[677]
Number one, is the agreement or the contract in question, is it oral or is it
[682]
written and the reason that's important is because it's easier, easier to prove a
[686]
written document versus a oral agreement that, you know, people might have different
[690]
recollections on. Number two is depending on whether or not it's oral or
[694]
written, do you have the written document in question? Do you have witnesses or
[699]
proof of some kind that an oral agreement actually existed? So basically,
[702]
what proof do you have of this agreement, regardless of the form? Number three is
[707]
have you complied with all the different requirements, obligations that you have
[712]
under this contract or is perform, your performance excused in some way and the
[717]
reason why that's important is because it's something where in order to sue for
[721]
breach of contract, you have to prove that you've done everything that you are
[725]
supposed to first. Not a lot of people know that, actually. Yeah, I couldn't tell
[730]
you why, but you have to prove that you've complied first or your, your
[734]
performance, your compliance is excused. Number four is what was the other guy to
[740]
the contract, the breaching party, what were they supposed to do for you. That
[744]
basically helps you determine damages, that helps you determine the scope of
[748]
your case, etc. It actually just is more of a psychological thing to help you
[752]
organize your case better. And lastly number five is what are your damages
[758]
under this breach of contract situation? You know, what are your expectation
[762]
damages? What are your consequential damages?
[765]
What are your incidental damages in terms of covering costs and so forth? So
[769]
hopefully all that made sense. Again breach of contract is something
[773]
that is actually quite common, but it's something where, I don't know, like I
[778]
guess people don't really organize their case that well so the thing is hopefully by,
[782]
you know, thinking of these five questions, by coming up with answers to
[785]
them, hopefully they will help you organize your case better, you approach
[789]
it in a more rational way. You're more prepared and if you are more prepared,
[793]
you know, ideally that helps you get a lawyer faster and it helps you, you know,
[797]
kind of get out of your situation sooner rather than later. So anyway, hopefully
[801]
all that helped. Go ahead and watch this video again, share, comment, like, subscribe,
[806]
all that stuff and I will talk to you guys next time.
[809]
Thanks.