Breach of contract cases can be extensive and costly for all parties involved. There is a lot to document before you can even file suit and, as time is money, unpaid dues can balloon quickly with interest accumulation.
Webb Law Group would like to take you inside a recently settled breach of contract case involving a construction agreement. During this case exploration, we will discuss the facts of the case while only changing the names of the parties involved. We will also explain the law behind the case that motivated its conclusion. This construction breach of contract case deals with both written and verbal agreements, unpaid dues and interest, additional lost earnings claimed as a result of the defendant’s unwillingness to pay, and unjust enrichment.
The Case
Joe Contractor of ABC Construction was hired by 123 Company to perform construction work on a property. The initial estimate provided by Mr. Contractor to 123 Company of $178,430.00 quickly increased due to being asked for additional work that was not included in the original proposal. While the only signed contract was for the initial agreement, verbal agreements are binding in certain circumstances.
Mr. Contractor was advised by a representative of 123 Company to continue with the additional work, advising the contractor that he would be “taken care of”. The additional work amounted to $63,098.43 plus 10% employer’s cost totaled $69,408.27. Including supply and hotel costs plus the original estimate, the full balance came to $250,645.54 for the work performed.
As is common in cases involving a verbal agreement, one of the parties denied the conversation ever happened. The representative of 123 Company denied permitting the additional work and refused to pay for it. In fact, the company even shorted Mr. Contractor on the original proposal, initially only paying $50,679.50. Under pressure from the union Mr. Contractor was a part of, 123 Company eventually decided to pay Mr. Contractor an additional $50,360.75. The total amount due remaining after these payments totaled $157,046.08 including time and profit interest at 15%, a fair addition for unpaid dues.
In California law, a plaintiff may also claim damages as a result of other consequences from the breach of contract. Mr. Contractor was additionally able to claim $80,000 in damages as a result of being excluded from the union since the losses had been explained prior to and inside the contract as “liquidated damages.” This made the total of all damages in our case against the defendant $237,046.08.
In the end, a fair settlement and equitable relief was reached for our client in the amount of $187,500.00.
Why They Settled
‘123 Company’ was the defendant in this case. ‘Mr. Contractor’ was the plaintiff and our client. There were two major factors that influenced the decision of the defendant to agree to a settlement that was reasonable for the plaintiff. The two factors involved in our ability to present the strength of our client’s case were the documentation of the performed work by our client and California Law regarding unjust enrichment.
In any case involving hourly labor, it is important for a contractor to document the work performed on the project. It is equally important for the hiring party to document the work as well, in order to prevent discrepancies such as more hours being billed than agreed to. In this case, our client kept detailed records of all the work performed for the defendant. While we always recommend agreements, especially large dollar ones, are in writing, the detailed records of the hours of work exceeding the original estimate made it obvious that additional work was needed and requested by the defendant.
Additional legal validation of the verbal agreement came in the form of California Law regarding unjust enrichment. A plaintiff may raise a restitution claim, synonymous with unjust enrichment in California, when the defendant benefited from an arrangement at the plaintiff’s expense. In this case, the defendant was getting additional work performed at their property at the plaintiff’s expense without any clear intent for fair compensation. Claiming the agreement never happened was not a reasonable legal defense.
It is likely that the defendant understood the strength of the plaintiff’s case and the probability of losing in court due to the efforts of presenting the case by Webb Law Group. As such, the defendant offered a settlement that was deemed reasonable by both Webb Law Group and our client.
As Lenden F. Webb will tell you, the ability to settle is invaluable. There is no guarantee what will happen in a courtroom and a reasonable settlement is often a satisfactory ending in a breach of contract case.
Are You Seeking an Attorney in a Breach of Contract Case?
Whether you are the plaintiff or defendant in a breach of contract case, Webb Law Group can assist you. Our law firm has years of experience dealing with business litigation matters including cases involving California breach of contract lawsuits. We are happy to review your case and advise you on how we can help and what to do next.
Webb Law Group is a reputable business law firm with experience in matters involving California Law, including handling business litigation matters. Having a reputable attorney by your side for these matters will help give you the best possible chance of a positive outcome in your case. If you feel you need legal representation, we are happy to review your legal needs and provide consultation and support where necessary.
For questions, or to schedule a consultation, contact us today at (559) 431-4888.