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5 Questions - California Breach of Contract - The Law Offices of Andy I. Chen - YouTube
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Hey everybody, it's Andy and welcome again to my office in Los Altos, California. I'm
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an attorney licensed to practice law in
California as well as New York and in
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this video I'm gonna go over the five
questions that I think you should be
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prepared to answer if you're going to
get involved in a breach of contract
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case. Now specifically I'm going to talk
about California because that's where I
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am, but these questions I think are going
to be general enough that even if you
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don't live in California they are going
to apply to you in one way or another. If
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it doesn't really kind of hurt you, like
if it doesn't kind of, you know, tax you, I
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guess, go ahead and, you know, kind of come up with the answers to these questions
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even though you don't live in California
because I think the principles, like I
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said, are general enough that, you know,
they're going to help you organize your
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case, they're going to help you find a
lawyer sooner, etc, etc. So
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anyway the, I guess, the concept of a
contract probably is not going to really
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excite a lot of you. You know, contract
lawyers sort of aside, I guess, but if
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you stop and think about it actually,
contracts actually underlie a lot of
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what daily life and kind of business
kind of, you know, really involves. So if,
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for instance, you're talking about a
contract between two companies where, you
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know, one company agrees to sell
supplies to another, you know, and it's
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worth, you know, tens or hundreds
and millions of dollars. If it's a
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situation where you're buying stuff on
credit and there's a contract about how
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you're supposed to pay, you know, when, how much, what the interest rate is, etc.
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That's really important. If it's stuff
where you're renting something, an
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apartment, if you're renting a house,
whatever, like you know, a variety of
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scenarios basically, uh, involve a contract
of some kind. A variety of scenarios in the
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modern economy involve contracts of one
kind or another.
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So the breach of contract situation
actually applies, er sorry, arises rather,
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arises more often than you would sort of
immediately think just by hearing the
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word "contract." So hopefully that kind of
made sense as a sort of background.
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Breach of contract cases are actually
quite common is the point I'm trying
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to make. So, I guess, if if all of that
sort of, you know, made sense, let's go
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ahead and get started.
So the first question that I would want
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to know the answer to if I was
interviewing a prospective client
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basically would be is this agreement
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that we're talking about, is this agreement
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oral or written. Uh, and I think the reason
for wanting to know the answer to that,
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you know, should hopefully be obvious. A
oral agreement that's just spoken
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between two people obviously is going to
be a lot harder to prove. You know, you
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might have witnesses but, you know, you
might, you know, the other guy to the
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contract might have witnesses and maybe
the witnesses contradict each other. You
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might have recordings but, you know, the
recordings could be subject to attack
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also. A written document that, you know, is
clear - ideally - if it's clear, specific, if
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it's signed by the parties and dated and
so forth, that's going to be a lot more
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clear than, you know, a he-said, she-said, for instance, about what this oral agreement
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supposedly was. And if you're talking
about a written agreement actually, I
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actually have a separate video on my
channel about the Statute of Frauds in
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California. I'm going to link that down
below just in case you're interested.
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Yeah, so anyway, the basic idea for
question number one is is this oral or
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is this written? What kind of agreement
is this? Number two I've sort of alluded
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to already and that basically is,
depending on how you answer question
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number one - oral or written - I guess, where is this document? If it's a written
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agreement, do you have the document? Where is it? You know, do you have copies? Do you,
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you know, is it signed, dated, etc? What
like, where is this, is this document that
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supposedly memorialized the agreement
and also, for instance, you know, does it
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comply with the Statute of Frauds, for
instance? Number two, or I guess the
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second way to answer number two, is if
this is an oral agreement situation, what
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proof do you have that there was an
agreement at all? You know, do you have an
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audio recording? Do you have emails after
the fact that were just sent as
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confirmation? Do you have witnesses?
Do you have videotape? Whatever. Like
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because an oral agreement is very hard
to prove, what proof do you have of it?
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Yeah, so that's basically question
number two. Do you have the written
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document, if this is a written agreement,
or do you have proof that the oral
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agreement said this, you know, actually
existed, etc. So that's number two. Number
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three is perhaps a little bit esoteric, I
guess, a little bit sort of technical,
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but number three basically is have you -
you as the prospective party -
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have you basically complied with
everything you're supposed to do in this
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contract or was your perform excused
in some way? So, I guess, not a lot of
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people know this - or not a lot of lawyers
even know this - is that if you're trying
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to sue for breach of contract, you
yourself have to basically show that you
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have done everything you're supposed to.
You have performed under the contract.
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You've complied with it. The other guy
has not and, therefore, you're
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you're suing for that. A lot of people
try to actually sue the other guy, you
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know, for breach of contract, when it's
actually quite obvious, quite evident,
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that they have not complied with the
contract either. So, um, basically in
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general, in order to sue for breach of
contract, you have to show that you've
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complied, you've performed, you have done
everything perfectly. The other guy is
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the jerk, the other guy is the one who's
causing problems, etc. So depending on the
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contract, you know, it is possible for you
to actually prove that you've done
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everything, it's actually possible to, you
know, for you to do, to do your part. In, in
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some situations, in some contracts it's
actually not. So the thing is let's say,
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for instance, that in order for you to do
your part, the other guy needs to do his
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part first, let's say, or let's say that
the contract was so vague that, you know,
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you, you had no idea what to do and
you were trying to negotiate it or
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something. So in certain contracts it is
actually quite possible to show
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definitively that yes, you have, you know,
performed, you have complied, etc. In other
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situations that might not be so easy to
do that and that's kind of where you
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know legal representation I think is
going to be really helpful for you. So
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that's number three: have you as the
prospective, you know, the prospective
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client, prospective party here, have you
done everything you're supposed to or is
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your performance excused in some way?
Number four is sort of related, I guess,
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to number three and number four
basically is what was the other guy
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supposed to do for you? You know, if this
contract had actually been performed
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properly, what was the other guy supposed
to do? You know, was he supposed to sell
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you a bunch of components at a really
good price? Was he supposed to, you know,
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pay on a certain schedule? Was he supposed to, you know, rent you this apartment? Rent you
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this boat? Whatever. To have a good idea
of what the contract was supposed to kind
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of give you, I guess,
that's actually really helpful to kind
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of define the case, to help you, kind of,
compute what the damages are, etc. So
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hopefully, well again, it depends on the
contract, but hopefully it's actually
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really easy to kind of articulate or try
to, to organize, to determine what exactly
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this contract was supposed to do for you.
So that's number four: what exactly were
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you supposed to get? What was the other
guy supposed to do for you, you know,
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basically under this contract. Number
five. Number five basically is going to
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be what your damages are under this
agreement. So, you know, if there was a
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written contract and the other guy
breached it, how much damage did that do
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for you? Like what money would make it so
that you are basically in the same
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position you would have been in had this
contract actually been performed? So this
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gets into a little bit more of a
discussion, I guess, because when you talk
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about contract damages, there's actually
several kinds. So one term which you
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might kind of see or hear, you know, if
you google it enough, I guess, is
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"expectation damages." So that's something where if you were, like if you had a
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contract that was supposed to give you a
really good price on say a million
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widgets or something and that contract
was breached, then, you know, your damages
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hopefully would be, okay whatever the
difference in price that you had to pay
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was multiplied by the million widgets.
You might hear another term called
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"consequential damages." Those are not real complicated, like they're not hard to kind
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of explain. They might be a little weird
to kind of think about because normal
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people don't think about it.
Consequential damages basically are
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damages that you suffer as a consequence
of the breach that on the surface might
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not seem real obvious. In law school, how
its taught basically is there's a case
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called Hardesty is what I, you know,
learned it in, but the basic idea, if you
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can imagine, is like let's say that you
are shipping something, you know, via UPS
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or the mail - the US Postal Service -
and you pay, you know, ten dollars to ship
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this thing, but, you know, this thing that
you're shipping actually is not just
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worth ten dollars. It might be worth
millions of dollars because it's
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computer code, because it's, you know, some research
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paper, because it's a patent or something
and, you know, the value, you know,
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basically is that, okay this patent if it
arrives in time, this software code if it
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arrives intact, that code or that patent
is gonna be worth millions of dollars
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and had, you know, if basically if UPS
or the Postal Service loses it,
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what are they basically in for? Are they,
are they responsible for all the money
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that you would have made from this
software, from this patent, or are they
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just responsible for, you know, the ten or
fifteen dollars, or whatever it is that
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they basically charged you to ship this
thing? So, I guess, the consequential
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damages part basically would be like, you
know, is it kind of natural, foreseeable, I
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guess, that this item that UPS is
shipping for you really is worth
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millions or billions of dollars? Yeah
so hopefully that kind of made sense.
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Consequential damages, you can google it.
It's not terribly involved, despite how I,
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despite how I've explained it, but
yeah, that might be one type of damage
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also. If you are in a situation where the
other guy has breached, you might have
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covering costs related to your,
related to, you know, your mitigation
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effort, let's say. That might be there
also, that might be a component of your
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damage also. A really good example of
that I think would be if you're a
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landlord and your tenant basically
breaches, you know, his or her lease. Let's
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say that, you know, they lose their job
and they have to move out, you know, all
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of a sudden, I guess, like even though you have a contract. If you have to
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suddenly advertise for a new tenant,
there might be some incidental, like
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advertising sort of expenses, background
check expenses, things like that, you know,
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whatever expenses are associated with
moving a new tenant into a place. Those
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types of costs, incidental costs, maybe
that's something you can recover also. So
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those are basically the five types of
questions that I think would be really
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helpful for you if you have a breach of
contract situation. You know, it'd be helpful if
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you knew the answers to those.
So to summarize again, to kind of recap.
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Number one, is the agreement or the
contract in question, is it oral or is it
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written and the reason that's important
is because it's easier, easier to prove a
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written document versus a oral agreement that, you know, people might have different
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recollections on. Number two is
depending on whether or not it's oral or
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written, do you have the written document
in question? Do you have witnesses or
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proof of some kind that an oral
agreement actually existed? So basically,
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what proof do you have of this agreement,
regardless of the form? Number three is
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have you complied with all the different
requirements, obligations that you have
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under this contract or is perform, your
performance excused in some way and the
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reason why that's important is because
it's something where in order to sue for
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breach of contract, you have to prove
that you've done everything that you are
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supposed to first. Not a lot of people
know that, actually. Yeah, I couldn't tell
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you why, but you have to prove that
you've complied first or your, your
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performance, your compliance is excused.
Number four is what was the other guy to
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the contract, the breaching party, what
were they supposed to do for you. That
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basically helps you determine damages,
that helps you determine the scope of
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your case, etc. It actually just is more
of a psychological thing to help you
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organize your case better. And lastly
number five is what are your damages
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under this breach of contract situation?
You know, what are your expectation
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damages? What are your consequential
damages?
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What are your incidental damages in
terms of covering costs and so forth? So
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hopefully all that made sense. Again breach of contract is something
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that is actually quite common, but it's
something where, I don't know, like I
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guess people don't really organize their
case that well so the thing is hopefully by,
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you know, thinking of these five
questions, by coming up with answers to
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them, hopefully they will help you
organize your case better, you approach
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it in a more rational way. You're more
prepared and if you are more prepared,
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you know, ideally that helps you get a
lawyer faster and it helps you, you know,
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kind of get out of your situation sooner
rather than later. So anyway, hopefully
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all that helped. Go ahead and watch this
video again, share, comment, like, subscribe,
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all that stuff and I will talk to you
guys next time.
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Thanks.
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