Breach of contract occurs when one party fails to fulfill its obligations under a legally binding agreement. The following are the four essential elements that must be established to prevail on a breach of contract claim in Arizona.
1. Existence of a Valid Contract
In Arizona, a contract can be written or oral, though certain types of agreements, such as those involving real estate or that cannot be performed within one year, must be in writing under the state’s Statute of Frauds. A valid contract must contain the following components:
- Offer: One party must make a clear and definite offer to the other.
- Acceptance: The non-offering party must accept the offer and agree to the terms without condition or modification.
- Consideration: Both parties must exchange something of value, whether money, services, or goods, to form a binding contract.
Without each of these requisite elements, a valid contract does not exists and, thus, neither does a breach of contract claim.
2. Performance by the Claimant
The second element involves the claimant’s fulfillment of its contractual obligations. The claimant must show that it performed its contractual duties or, in the absence of performance, that it was excused from performing them. If the claimant failed to perform its part of the contract, the claimant generally cannot claim that the adverse party breached the agreement. In some cases, Arizona courts may consider the following factors in determining whether performance was required:
- Whether the other party prevented performance; or,
- If circumstances arose that made performance impossible.
In these cases, the claimant may be excused from performing its obligations.
3. Breach by the Defendant
The third element is that a breach occurred, meaning that the adverse party failed to meet its obligations under the contract. A breach can occur in several ways, including:
- Failure to Perform: The adverse party did not complete its agreed-upon duties.
- Substandard Performance: The adverse party’s performance is significantly below the level required by the contract.
- Anticipatory Breach: The adverse party indicates in advance that it will not fulfill its contractual obligations.
The court will examine the contract terms to determine whether a breach is material or minor. A material breach is one that goes to the heart of the agreement, meaning the non-breaching party is deprived of the benefit they expected from the contract. A minor breach may not result in the termination of the contract but can still entitle the non-breaching party to damages.
4. Damages
The final element in a breach of contract case is proving that the claimant suffered damages as a result of the breach. Damages refer to the losses the claimant sustained due to the adverse party’s failure to perform as agreed. These damages can be economic (e.g., financial losses) or, in some cases, non-economic (e.g., instances where specific performance or injunctive relief are sought, resulting in an adverse party being ordered to comply with its contractual obligations and duties).
Contact Weiss Brown
If you believe another party has breached a contract and caused you financial harm, our experienced Phoenix business disputes attorneys at Weiss Brown can help you understand your legal options. Contact us today for a consultation to discuss your case and protect your rights.
