Contracts are agreements, often written out, which explains the terms of the agreement and spells out the expectations of each party. A breach of contract occurs when one party does not act as expected or required by the contract. Sometimes, however, there can be confusion over what is considered a breach. One common issue is contracts that are not detailed enough. In those cases whether an act is a breach is not clearly defined in the contract so the breaching may not believe he or she did anything wrong and it will be up to a court to decide based on other factors.
However, there are instances even where contracts are very clear that terms maybe ignored when deciding if a party committed a breach. One way this can occur is if you allow a party to act in a way that is not in accordance with the terms of your agreement. This is called a waiver. If your actions differ from the expectations stated in the contract, your actions rule. You cannot later claim the other party breached the contract by not following certain terms when they did follow agreed upon actions.
Take for example, the New York case of Foley Inc. v Helix Group, Inc . In this case, Foley, Inc. (Foley) is suing Helix Group (Helix) for breach of contract for nonpayment. Helix was renting equipment from Foley. Helix complained to Foley about various problems with the machines, which resulted in a field mechanic attempting but failing to fix the machine, then replacement machines being installed and finally the contract abruptly ending. Foley claims it is owed for the time Helix had the machine as well as delivery fees for exchanging the machines. Helix claims that it either should not have to pay the fees or have a discount because the product never worked correctly. Foley responded that Helix claim was invalid because the agreement had a disclaimer of warranty clause in the contract. This clause should dismiss any liability from Foley once the goods were delivered to Helix.
The court found two potential problems with the warranty clause. The first issue was that the contract also had a clause which allowed for an inspection within 24 hours by Helix to look for issues with the equipment. This clause could be seen as a warranty, therefore contradicting the warranty disclaimer. The second issue was the fact the Foley tried to fix and ultimately replaced the equipment in question. The court claimed that because of those actions, Foley could not turn around and claim no warranty applied and it was not responsible for the equipment. Foley tried to end the case early through summary judgment, but the court decided it need more time and evidence to decide the case. Therefore, summary judgment was denied but the case will continue to trial and neither party was found at fault at this point in time.
Cases are time consuming and difficult. Preparation is your best defense in any case. If you have a possible contract case or issue please contact our office for assistance.
See Related Posts: