Breach of Contract

Breach of contract elements

We form contracts with each other, with businesses, and with friends on a daily basis. A breach of contract happens when some party to a contract fails to fulfill an obligation they were required to do.

When proving that someone breached a contract you need to consider the following elements of your case:

  1. There was a contract between the parties;
  2. You fulfilled your end of the contract or your failure to fulfill your end of the contract was justified;
  3. The other party failed to fulfill their end of the contract; and
  4. You suffered damages as a result of the other party’s breach of the contract.

A contract existed between you and the other party

The first requirement is simply that a valid contract had to exist between you and the other party. While this is the easiest to prove with a written contract, some oral contracts can also be enforced. There had to have been an offer and acceptance of that offer with a potential benefit for both parties. Importantly, if either party decided to change the original terms of the first offer, this would fail to form a contract.

Also, it is important to be aware that some contracts must generally be in writing such as the purchase of real estate.

You fulfilled your part or were justified not to and the other party failed to fulfill their end of the deal

In order to have a valid breach of contract case you must typically show that you actually fulfilled your part of the deal. You typically can’t claim that the other party owes you money or should be forced to perform if you yourself have not performed.

There are some exceptions to this, in some cases you are allowed not to perform your part of the contract if you reasonably believe and rely on certain assurances or failures from the other party. This can happen if you are informed or find out that the other party will not, or can’t perform their part of the deal.

You suffered damages as a result of the breach

Usually damages for a breach of contract action include the amount of money it would take to put you back in the position you would have been in if the breach did not happen. This generally includes economic (i.e. dollar amount) losses.

Under Colorado’s Economic Loss Rule, non-economic damages, such as for pain, suffering, and emotional distress, cannot be recovered on a breach of contract claim unless the other party owed you some duty independent from the contract. Examples of independent duties that can support tort claims for non-economic damages are fiduciary duties, or duties imposed by statute or administrative regulations.

Miscellaneous issues

The statue of limitations for bringing contract actions in Colorado is generally three years. However, it is generally six years for liquidated debts or non-liquidated determinable debts.

Colorado’s Statue of Frauds governs what type of contracts need to be in writing. It is important to understand that while oral contracts can be valid, some types of contracts generally have to be in writing (though there are exceptions to this, such as for oral contracts that are nonetheless substantially performed). In general, a contract that is in writing is easier to enforce because the details of the agreement are within the four corners of the page.