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Not All Contracts Are Fair

Not All Contracts Are Fair

Breach of contract cases occur when one party to the contract believes another party did not do as required under the contract. Sometimes the parties can work out the issue between themselves, but if they cannot, litigation is often the best next step. When deciding whether a party to a contract has breached the contract and the extent of damages, a court looks to previous court cases in the jurisdiction, any applicable laws in the state, and of course the contract itself. As long as the contract is not for an illegal purpose and is clear and unambiguous, the court will hold parties accountable to the terms of the contract as written.

Take for example, the New York case of Torres v. Temple B'Nai Israel. In this case, Gary Torres (Torres) sued Temple B'Nai Israel (Temple) for breach of contract. Torres was supposed to throw a fundraiser at Temple, but Temple cancelled the event four days before it was to occur. Torres is suing for breach of contract because he believes the cancellation of the event was improper. The contract at issue was a rental agreement drafted by Temple that contained many restrictions. There are two restrictions that are relevant to the dispute. First, is that Temple permitted alcoholic beverages to be served only as part of a meal or reception, and strictly forbade the sale of alcoholic beverages at the fundraising party. Second, is the provision pertaining to the possible cancellation of the contract stating that: “Temple reserves the right to cancel [the] contract at any time. Renter must cancel no later than 2 months prior to [the] affair for a full refund providing the room is re-rented.” The Temple cancelled the contract after learning the Torres was trying to get a twenty-four hour permit to serve alcohol at the event. Because of its restrictions on alcohol, Temple chose to cancel the event.

In the case, the clause in the contract which permits the Temple to cancel the contract at any time is stated clearly and unambiguously. The Court decided that it must follow the terms reached in the contract rather then granting a judgment based upon what may or may not seem fair to the party who suffered the loss. The court also found that Torres did not provide enough evidence regarding the alcohol permit. It was unclear, based on the evidence provided, whether Torres would be serving alcohol at the reception or attempting to sell alcohol. Based on this information the court found that Temple did not breach the contract and Torres was not owed damages.

It is important to know what you have agreed to. This case may have been avoided if Torres either told Temple he intended to get a short term liquor license but did not plan to sell liquor or if Torres made an agreement with a venue that allowed the sale of alcohol. If Torres worked with an attorney before or after signing the contract he could have saved himself some time and money. If you have a contract that you would like to be reviewed by an attorney, please contact our office.

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