That depends on the contract and whether there are special types of damages under the law.
Here are some common types of contract damages.
Contract damages that were bargained for are often called the benefit of the bargain. For example, in a promissory note where someone lent money, then receiving the money you lent back would be part of the contract damages. Additionally, for a promissory note, the interest bargained for (assuming no state law does not allow collection of that interest) would be part of the bargain.
Interest damages for known sums under California law. Under California Civil Code Section 3287, if the damages to be collected are certain or capable of being made certain, then interest may be collected, which can be up to 7 percent per year.
For further details on how damages are calculated, visit our blog on the legal and tax implications of cash payments.
What types of damages can you typically not recover for breaches of a contract?
Typically, for a breach of contract you cannot recover personal injuries like physical injuries, stress, or emotional distress. Also, generally, most breaches of contract will not allow recovery for fraud or punitive damages.
What about recovering my attorney’s fees and costs?
Generally, the only way to recover an attorney’s fee is based upon either it being in the contract between the parties or a law that permits recovery of attorney’s fees. Attorney’s fees are what you pay your attorney to represent you in a legal dispute, such as writing the lawsuit, corresponding with the other party, appearing in court, and court motions and trial.
Costs are actually something different. Costs are things like court filing fees, service of process fees. California Code of Civil Procedure Section 1032, and 1033.5 discuss costs. Specifically some costs include, filing, motion, and jury fees, juror fees, depositions when costs are allowed, interpreters (if needed), fees of expert witnesses if ordered by the court.
The statute is more specific, and there is case law that is used to interpret both attorney’s fees and costs. This summary is simply a short explanation to educate the reader.
Understanding the nuances of contract law and how it applies to your specific situation is vital; our business contracts services can provide the expertise you need. If you have questions about attorney’s fees or costs, contact our law firm or an attorney of your choosing to discuss the issue.
How do I recover my attorney’s fees and costs?
If a case settles, then the payment of the attorney’s fees and costs should be discussed or provided for (or agreed that none are owed) in the settlement agreement. If the case proceeds to trial, then after there is a judgment by the Court, a party files a memorandum of costs for the costs with the Court.
Then, the other side can challenge the costs by filing a motion to tax costs. The attorney’s fees are sought by making a motion for attorney’s fees before the Court. The other side will have an opportunity to oppose that motion for attorney’s fees and the Court will determine the attorney’s fees owed.
What are some defenses to a breach of contract, like a commercial lease agreement or a franchise agreement?
There are a number of defenses, but one that often comes up is the mitigation of damages. The defense of mitigation of damages is the legal doctrine where someone who is injured by a breach of contract tries to minimize or lower their damages by taking reasonable steps to minimize those damages.
In the context of a commercial lease agreement, after a tenant has vacated space, the landlord or property manager should make all reasonable efforts to rent out the space that the tenant left. To the extent that the landlord was able to (or should have been able to) obtain a new tenant, then the landlord cannot sue a tenant for that amount.
For example, if a tenant has a 5-year lease and leaves after 1 year, the landlord needs to take reasonable steps to find a new tenant. The landlord cannot just wait 4 years and expect the tenant to keep paying rent for the entire term. If a Court were to find that the landlord should have been able to find a new tenant in, say, 1 year, then the landlord would only get 1 year of rent owed by the tenant.
The landlord does not get more than 1 year because the doctrine of mitigation of damages requires that the landlord attempt to get a new tenant to replace the rent lost by the old tenant. Therefore, if you are a tenant breaking a lease, then you may be able to limit your exposure with this defense.
Contact our firm if you have been sued for breach of contract for contracts like commercial leases or franchise agreements. Our firm has experience handling commercial leases and franchise agreements. You can also explore our post on resolving real estate disputes to understand how these principles apply in broader contexts.
What types of commercial tenants have you represented?
The firm has represented commercial tenants who have disputes with their property owners or property managers. For example, many commercial tenants may have disputes with their landlord regarding lease termination, back rent owed, security deposits, or similar items.
The firm has advised commercial tenants such as professional offices, like dentists, doctors, accountants, financial advisors, insurance brokers, and real estate professionals. The firm has also represented retail commercial tenants such as restaurants, convenience stores, apparel or clothing retailers, cell phone accessories or repairs, hair salons, and spas.
Often, the commercial lease agreement is very one-sided in favor of the property owner because the latter tends to have market power in this relationship. Generally, you have an obligation to pay what you agreed to pay in the lease agreement.
However, sometimes businesses fail or need to be moved. You can still work with a firm like ours to try to negotiate your exit from the space or to deal with a landlord suing you for back rent.
For comprehensive support in these and other business legal matters, consider consulting with Nick Heimlich, San Jose’s trusted business lawyer.
