Contracts are entered into with the best intentions and with an expectation that all parties will fulfill their part of the deal. This, however, does not always happen. When one party breaches a contract, there are many options available to the non-breaching party. On one hand you should try to work it out, because not all breaches are intentional. Finding a way to settle it without outside help is usually the quickest and easiest way to fix things-- when you succeed. But sometimes people do not want to work it out, in which case litigation is most likely your best option.
When the non-breaching party of a contract brings a breach of contract claim to court, there are two ways to shape the case. You can either ask for the entire contract to be invalidated or ask to have it enforced. Invalidating the contract releases you from any obligations and you can ask for damages if you suffered due to the broken contract. Enforcing the contract requires both of you to act as agreed to according to the contract. In some cases, the best course will be dictated by your needs. For example, asking to cancel the contract makes the most sense if you had to hire another person to complete a job left incomplete due to a breach of contract. In other cases, it is up to you whether to cancel or compel completion of the contract. When it is your choice, it is important to ask for one or the other, not a combination of both, if you want to succeed in your case.
Take for example the New York case of Plancher v. Katz. In this case, Kevin Plancher (Plancher) is suing his previous business partners for breach of contract. Plancher and his partners ended their business relationship amicably. All partners at the time Plancher left signed a Settlement Agreement. Plancher is suing for many reasons, including for the breach of the Settlement Agreement. His ex-partners are countersuing for multiple reasons, including claims that Plancher also breached the Settlement Agreement. Plancher admits to breaching the contract but argued that because his partners also breached the contract, his breach should be excused. The court, however, disagreed with Plancher's argument.
Under New York case law, when a party to a contract breaches, the non-breaching party has the option to either treat the entire contract as broken and sue for damages or reject the breach and treat the contract as valid. In this case, the court believes Plancher wants both, which is not possible. Plancher's request to excuse his breach would only be valid if he was seeking to invalidate the contract based on his partners' breach. Because, however, Plancher has chosen to treat the contract as valid in this suit, his breach cannot be ignored. Therefore, the court decided that Plancher did breach the agreement, but is waiting to decide whether, and to what extent, his partners also breached the contract.
Contractual issues can be complicated as there are often multiple ways to find a resolution. The resolution that is best for you will depend on your situation and ultimate goal. An attorney can help look through your options and choose your optimal path. If you have business or contractual issues in the New York area, please contact our office.