California Breach of Contract Demand Letters

Contract Law Elements | Material vs Minor Breach | Statute of Limitations | Damages & Remedies

California Contract Law: Legal Framework for Breach Claims
Core Legal Framework: California contract law is governed by both the California Civil Code and extensive case law. A breach of contract occurs when one party fails to perform their obligations under a valid contract without legal excuse. Understanding the elements of a valid contract and what constitutes a breach is essential to pursuing your claim and recovering damages.
Elements of a Valid Contract

Before you can claim breach, you must establish that a valid, enforceable contract exists. Under California law, a contract requires:

Element Description
Parties Capable of Contracting Parties must have legal capacity (adults of sound mind, not under duress or undue influence). See Civil Code Section 1556.
Mutual Consent (Offer and Acceptance) Both parties must agree to the same terms. One party makes an offer, and the other accepts it. Civil Code Sections 1550, 1565.
Lawful Object The contract must be for a legal purpose. Contracts for illegal activities are void and unenforceable. Civil Code Section 1550.
Sufficient Consideration Each party must give something of value (money, services, goods, promises). A gratuitous promise is not enforceable. Civil Code Section 1605.
Statute of Frauds: Certain contracts must be in writing to be enforceable under California Civil Code Section 1624. These include contracts for the sale of real property, contracts that cannot be performed within one year, agreements to pay someone else's debt, and contracts for the sale of goods over $500 (under the Commercial Code).
Elements of Breach of Contract

To prevail on a breach of contract claim in California, you must prove all four elements:

  • Existence of a Contract: A valid contract exists between you and the defendant
  • Plaintiff's Performance or Excuse: You performed your obligations under the contract (or were excused from performance)
  • Defendant's Breach: The other party failed to perform their obligations under the contract
  • Damages: You suffered damages as a result of the breach
Material Breach vs. Minor Breach

Not all breaches are treated equally under California law. The distinction between material and minor breach affects your remedies:

Type of Breach Definition Consequences
Material Breach A failure to perform that goes to the essence of the contract and substantially defeats its purpose. The breach is so significant that the non-breaching party did not receive the benefit of the bargain. The non-breaching party may: (1) terminate the contract, (2) refuse further performance, and (3) sue for damages including lost benefit of the bargain.
Minor Breach (Partial Breach) A failure to perform that does not defeat the purpose of the contract. The non-breaching party still receives substantially what they bargained for. The non-breaching party may sue for damages caused by the breach but must continue to perform their own obligations. They cannot terminate the contract.
Factors Determining Materiality: California courts consider: (1) the extent to which the injured party will be deprived of the expected benefit, (2) whether the injured party can be adequately compensated, (3) the extent of part performance by the breaching party, (4) hardship to the breaching party, (5) likelihood the breaching party will cure, and (6) whether the breach was willful or negligent.
Anticipatory Breach (Anticipatory Repudiation)

An anticipatory breach occurs when one party, before performance is due, unequivocally indicates they will not perform their contractual obligations:

  • Definition: A clear and definite statement or action indicating the party will not or cannot perform when performance is due
  • Examples: Seller announces they will not deliver goods, buyer states they will not pay, party makes performance impossible by selling the subject matter to someone else
  • Non-breaching Party's Options: (1) Treat the repudiation as an immediate breach and sue for damages, (2) wait until performance is due and sue then, or (3) urge the breaching party to perform
  • Retraction: The repudiating party may retract if the other party has not materially changed position in reliance on the repudiation
Statute of Limitations

You must file your breach of contract lawsuit within the applicable limitations period:

Contract Type Statute of Limitations Legal Authority
Written Contract 4 years from date of breach California Code of Civil Procedure Section 337
Oral Contract 2 years from date of breach California Code of Civil Procedure Section 339
Contract for Sale of Goods (UCC) 4 years from date of breach California Commercial Code Section 2725
Critical Deadline: The statute of limitations begins to run when the breach occurs, not when you discover it (with limited exceptions for fraud or concealment). If you fail to file within the limitations period, your claim is barred forever. Send your demand letter promptly and track your deadlines carefully.
Key California Civil Code Provisions
  • Civil Code Section 1549: Definition of a contract
  • Civil Code Section 1550: Essential elements of a contract
  • Civil Code Section 1565-1567: Consent requirements
  • Civil Code Section 1605-1615: Consideration
  • Civil Code Section 1624: Statute of Frauds (contracts required to be in writing)
  • Civil Code Section 3300: Damages for breach of contract
  • Civil Code Section 3358: Measure of damages
  • Civil Code Section 3359: Damages must be certain
Common Breach of Contract Issues
1. Non-Performance (Total Breach)
Complete Failure to Perform: Non-performance is the most straightforward type of breach. The breaching party simply fails to do what they promised in the contract. This typically constitutes a material breach entitling you to terminate and sue for full damages.
  • Contractor hired to build a deck never shows up or starts work
  • Seller fails to deliver goods after receiving payment
  • Service provider never provides the contracted services
  • Buyer refuses to pay for goods or services already delivered
  • Landlord fails to deliver possession of leased premises
2. Late Performance (Delayed Performance)
  • Time is of the Essence: If the contract states "time is of the essence," late performance is a material breach
  • Implied Reasonable Time: If no deadline is specified, performance must occur within a reasonable time
  • Substantial Delay: Even without a "time is of the essence" clause, excessive delay may be material if it defeats the purpose of the contract
  • Consequences: Late delivery of wedding flowers after the wedding is a material breach; late delivery of office supplies by one day is likely minor
Making Time of the Essence: Even if your original contract did not include a "time is of the essence" clause, you can make reasonable time essential by giving the other party written notice that if performance is not completed by a specified date, you will treat the contract as breached.
3. Defective Performance (Partial or Substandard)

The breaching party performs but fails to meet contract specifications:

Examples of Defective Performance Likely Classification
Contractor installs wrong color cabinets (easily replaced) Minor breach - damages for cost to correct
Contractor uses substandard materials causing structural issues Material breach - may justify termination
Delivered goods have minor cosmetic flaws Minor breach - damages for diminished value
Delivered goods are fundamentally different from what was ordered Material breach - rejection and full refund
Software delivered but missing several key features Depends on importance of missing features
4. Failure to Pay
  • Non-Payment: Buyer or client fails to pay for goods, services, or work performed
  • Partial Payment: Payment of less than the full amount owed
  • Late Payment: Payment after the due date specified in contract
  • Dishonored Payment: Check bounces, credit card is declined, payment reversed
  • Interest and Fees: Contract may provide for late fees and interest on unpaid amounts
California Prompt Payment Laws: For certain transactions, California law mandates specific payment timelines. For example, contractors must be paid within a reasonable time, and construction contract progress payments have specific requirements under Civil Code Section 8800.
5. Repudiation (Refusal to Perform)

The breaching party communicates, either through words or conduct, that they will not perform:

  • Express Repudiation: Clear statement: "I am not going to deliver the goods" or "I will not complete this project"
  • Implied Repudiation: Actions making performance impossible (selling the unique item to someone else)
  • Uncertainty: If the repudiation is ambiguous, you may demand assurance of performance
  • Your Response: You can treat anticipatory repudiation as an immediate breach or wait for the performance date
6. Breach of Warranty
  • Express Warranties: Specific promises or representations about the quality, condition, or specifications of goods or services
  • Implied Warranty of Merchantability: Goods must be fit for ordinary purposes (Commercial Code Section 2314)
  • Implied Warranty of Fitness: When seller knows buyer's particular purpose, goods must be fit for that purpose (Commercial Code Section 2315)
  • Breach Timing: Warranty breach may occur when defect is discovered, even after delivery
7. Breach of Condition Precedent
  • A condition that must be satisfied before a party's duty to perform arises
  • Example: Financing contingency in real estate purchase - buyer's obligation only arises if financing is obtained
  • Failure of condition precedent may excuse performance rather than constitute breach
  • Distinguish between true conditions and promises
How to Write Your Breach of Contract Demand Letter
Step 1: Gather Your Documentation

Before writing your demand letter, compile all relevant evidence:

  • The Contract: The original signed agreement, including all amendments, addenda, and attachments
  • Correspondence: All emails, letters, text messages, and other communications related to the contract and breach
  • Performance Records: Evidence of your performance (receipts, invoices, delivery confirmations, work product)
  • Breach Documentation: Evidence of the other party's failure to perform (missed deadlines, rejected deliveries, bounced checks)
  • Damage Evidence: Records establishing your damages (invoices for replacement goods, lost profit calculations, cost to cure)
  • Payment Records: Evidence of amounts paid and amounts due
  • Witness Information: Names and contact information of witnesses to the breach
Step 2: Identify the Specific Contract Provisions Breached
Be Specific: Your demand letter should cite the exact provisions of the contract that were breached. Quote the relevant language directly from the contract. This demonstrates you have a clear legal basis and puts the other party on notice of exactly what they failed to do.

Example Language:

  • "Section 3.2 of the Agreement states: 'Seller shall deliver all goods on or before March 1, 2024.' You failed to deliver by this date."
  • "Paragraph 5 requires 'all work shall be performed in a workmanlike manner.' The work you performed fails to meet this standard as evidenced by..."
  • "The contract specifies payment of $10,000 'due upon completion.' Work was completed on [date], but you have failed to pay."
Step 3: Calculate Your Damages

California law allows recovery of damages that naturally flow from the breach and were reasonably foreseeable:

Damage Type How to Calculate
Compensatory Damages (Benefit of the Bargain) The difference between the value of performance as promised and the value actually received. What would put you in the position you would have been in if the contract had been performed?
Consequential Damages Losses flowing from the breach that were reasonably foreseeable at the time of contracting (e.g., lost profits, additional expenses incurred)
Incidental Damages Reasonable costs incurred as a result of the breach (e.g., inspection costs, costs of finding replacement goods/services)
Cost of Completion/Correction If defective performance, the cost to complete or correct the work
Diminution in Value If completion cost is disproportionate, the difference in value between promised and actual performance
Damages Must Be Certain: Under California Civil Code Section 3301, damages must be clearly ascertainable in both their nature and origin. Speculative damages are not recoverable. Be prepared to document and prove each element of damages with specificity.
Step 4: Format and Structure Your Letter

Essential Components:

Component What to Include
Header Your name, address, phone, email; date; recipient's name and address
Subject Line "Demand for Performance / Breach of Contract" or "Notice of Breach and Demand for Cure"
Contract Identification Identify the contract by date, parties, and subject matter
Your Performance State that you have fully performed your obligations (or explain why you were excused)
Statement of Breach Describe specifically how the other party breached, citing contract provisions
Damages Itemize the damages you have suffered as a result of the breach
Demand State exactly what you are demanding: payment, performance, cure, or termination with damages
Deadline Set a reasonable deadline (typically 10-30 days)
Consequences State that you will pursue legal action if the demand is not met
Step 5: Determine Appropriate Remedy to Demand
  • Cure/Specific Performance: Demand that the breaching party complete their performance
  • Payment of Damages: Demand monetary compensation for losses caused by the breach
  • Contract Termination: For material breach, state you are treating the contract as terminated and demand return of any payments or property
  • Combination: You may demand cure within a deadline, with damages if not cured, or termination and full damages
Step 6: Delivery Method
  • Certified Mail, Return Receipt Requested: Provides proof of delivery and date received
  • Email + Certified Mail: Send via both for immediate notice and legal documentation
  • Contract Notice Provisions: Check if your contract specifies how notices must be sent and follow those requirements
  • Keep Copies: Retain copies of the letter, all attachments, and mailing receipts
Check Notice Requirements: Many contracts contain provisions specifying how notices must be given (e.g., "All notices shall be sent by certified mail to the addresses set forth above"). Failure to follow contract notice provisions could affect your rights. Review your contract carefully before sending your demand.
Sample Breach of Contract Demand Letters
Sample 1: Initial Breach Notice (Notice of Default)
[Your Name] [Your Address] [City, State ZIP] [Phone Number] [Email Address] [Date] VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED [and via email to: recipient@email.com] [Recipient Name] [Recipient Address] [City, State ZIP] RE: NOTICE OF BREACH OF CONTRACT Contract Dated: [Contract Date] Subject: [Description of Contract, e.g., "Website Development Services"] Dear [Recipient Name]: This letter provides formal notice that you are in breach of the [Agreement Name] dated [Date] (the "Agreement") between [Your Name/Company] ("Client") and [Recipient Name/Company] ("Contractor"). THE AGREEMENT On [Contract Date], we entered into a written Agreement for [description of subject matter]. Under the Agreement, you agreed to [describe the other party's key obligations]. I agreed to pay $[amount] for these services, of which I have already paid $[amount paid]. YOUR BREACH You have breached the Agreement in the following respects: 1. FAILURE TO MEET DEADLINE: Section [X] of the Agreement requires completion of [work/delivery] by [date]. As of the date of this letter, [X days/weeks/months] after the deadline, you have failed to complete this work. 2. FAILURE TO PERFORM: [Describe specific failures, e.g., "You have failed to deliver the website design mockups as required by Section 4.1 of the Agreement."] 3. [Additional breaches as applicable] MY PERFORMANCE I have fully performed all of my obligations under the Agreement. Specifically, I have [describe your performance, e.g., "paid the initial deposit of $X," "provided all required specifications and materials," "been available for meetings as requested"]. DEMAND FOR CURE I hereby demand that you cure your breach by performing the following within FIFTEEN (15) DAYS of your receipt of this letter: 1. [Specific action required, e.g., "Complete and deliver the website design mockups"] 2. [Additional requirements] 3. Provide a written schedule for completion of all remaining work If you fail to cure your breach within the time specified, I reserve the right to: - Terminate the Agreement for material breach - Demand return of all amounts paid ($[amount]) - Pursue legal action for damages, including consequential damages, attorney's fees, and costs Please contact me immediately upon receipt of this letter to discuss how you intend to cure this breach. This letter is sent without waiver of any rights or remedies, all of which are expressly reserved. Sincerely, [Your Signature] [Your Printed Name] Enclosures: - Copy of Agreement dated [Date] - Payment records
Sample 2: Cure Demand (With Specific Performance Request)
[Your Name] [Your Address] [City, State ZIP] [Phone Number] [Email Address] [Date] VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED [Contractor/Vendor Name] [Address] [City, State ZIP] RE: DEMAND TO CURE BREACH OF CONTRACT - DEFECTIVE PERFORMANCE Contract: [Description] dated [Date] Project Address: [If applicable] Dear [Name]: This letter constitutes a formal demand to cure defective performance under our contract dated [Date] for [description of work/services] (the "Contract"). CONTRACT TERMS Under the Contract, you agreed to [describe contracted work, e.g., "renovate the kitchen at the above address, including installation of new cabinets, countertops, and appliances"]. The Contract specifies that "[quote relevant contract language about quality or specifications]." The total contract price is $[amount]. I have paid $[amount paid to date]. DEFECTIVE PERFORMANCE Upon inspection of the completed work, the following defects and deficiencies have been identified: 1. CABINETS: The cabinets installed are [brand/model], not the [specified brand/model] specified in Exhibit A to the Contract. The installed cabinets are of inferior quality and do not match the samples approved prior to installation. 2. COUNTERTOPS: The granite countertops contain visible cracks and chips. The seams are uneven and visible, contrary to the specification that "all seams shall be professionally finished and minimally visible." 3. APPLIANCES: The range hood was installed without proper venting to the exterior, in violation of the Contract requirement that "all installations shall comply with applicable building codes." 4. WORKMANSHIP: [Describe additional defects with specificity] These defects constitute breach of the Contract's requirement for [workmanlike performance/specifications/etc.] and violate California Civil Code Section [if applicable]. DEMAND FOR CURE I demand that you cure these defects within TWENTY-ONE (21) DAYS of your receipt of this letter by: 1. Removing the incorrect cabinets and installing cabinets matching the specifications in Exhibit A at no additional cost; 2. Replacing or professionally repairing the defective countertops; 3. Correcting the range hood installation to comply with code requirements; 4. [Additional cure requirements] I will make the property available for you to perform this work at reasonable times upon advance notice. CONSEQUENCES OF FAILURE TO CURE If you fail to cure these defects within 21 days, I will: 1. Hire a qualified contractor to complete and correct the work 2. Withhold the balance of payment ($[balance due]) and apply it toward correction costs 3. Pursue legal action against you for the cost of correction, any additional damages, and attorney's fees as provided in Section [X] of the Contract Please contact me within 48 hours to schedule access for the cure work. Sincerely, [Your Signature] [Your Printed Name] Enclosures: - Photos documenting defects (dated) - Copy of Contract and Exhibit A specifications - Inspector's report (if applicable)
Sample 3: Final Demand for Payment (Breach of Payment Obligation)
[Your Name/Company Name] [Your Address] [City, State ZIP] [Phone Number] [Email Address] [Date] VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED [Debtor Name/Company Name] [Address] [City, State ZIP] RE: FINAL DEMAND FOR PAYMENT - BREACH OF CONTRACT Invoice No(s): [Invoice Numbers] Contract Date: [Date] Amount Due: $[Amount] Dear [Name]: This is a FINAL DEMAND for payment of amounts owed under our contract dated [Date] (the "Contract") for [description of goods/services provided]. BACKGROUND Pursuant to the Contract, I provided [goods/services] to you as described below: [Description of goods/services provided] Under Section [X] of the Contract, payment of $[amount] was due [payment terms, e.g., "upon delivery," "within 30 days of invoice," "upon completion of work"]. AMOUNTS DUE AND OWING The following invoices remain unpaid: Invoice #[X] dated [Date]: $[Amount] Invoice #[Y] dated [Date]: $[Amount] Late fees per Contract: $[Amount] Interest at [X]% per annum: $[Amount] -------------------------------------------- TOTAL AMOUNT DUE: $[Total] MY COMPLETE PERFORMANCE I have fully performed all of my obligations under the Contract. [Describe performance, e.g., "All goods were delivered on [Date] and accepted by you without objection." "All services were completed on [Date] and you confirmed satisfaction in your email dated [Date]."] PRIOR COLLECTION ATTEMPTS I have made multiple attempts to collect this debt: - [Date]: Sent invoice via email - [Date]: Sent past-due reminder - [Date]: Called and left voicemail - [Date]: Sent collection letter You have failed to pay or respond to these communications. DEMAND I DEMAND that you pay the full amount of $[Total] within TEN (10) DAYS of your receipt of this letter. Payment should be made by certified check or wire transfer to: [Payment instructions] CONSEQUENCES OF NON-PAYMENT If I do not receive full payment within 10 days, I will, without further notice: 1. File a lawsuit against you in [Small Claims Court/Superior Court] for the full amount owed, plus: - Pre-judgment interest at the legal rate - Attorney's fees and costs as provided in Section [X] of the Contract - Court costs and service fees 2. Report this debt to credit reporting agencies 3. Pursue all available collection remedies including wage garnishment and bank levy Your failure to pay has caused me significant financial harm and disruption. I intend to pursue this matter aggressively if not resolved within the deadline stated above. This is my final demand before litigation. There will be no further warnings. Sincerely, [Your Signature] [Your Printed Name] Enclosures: - Copy of Contract - Copies of unpaid invoices - Proof of delivery/completion
Sample 4: Pre-Litigation Notice (Material Breach - Contract Termination)
[Your Name] [Your Address] [City, State ZIP] [Phone Number] [Email Address] [Date] VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED [Breaching Party Name] [Address] [City, State ZIP] RE: NOTICE OF TERMINATION FOR MATERIAL BREACH AND FINAL PRE-LITIGATION DEMAND Contract: [Agreement Name] dated [Date] Dear [Name]: This letter constitutes formal notice that, due to your material breach, I am terminating the [Agreement Name] dated [Date] (the "Agreement") between [Your Name] and [Breaching Party Name], effective immediately. This is also my FINAL DEMAND before filing a lawsuit in California Superior Court. MATERIAL BREACH You have materially breached the Agreement as follows: 1. TOTAL FAILURE TO PERFORM: Despite my full payment of $[amount] on [date], you have completely failed to perform your obligations under the Agreement. Specifically, you agreed to [describe contracted obligation], but as of [date], [X days/weeks/months] past the deadline, you have: - Failed to [specific failure] - Failed to [specific failure] - Failed to respond to my communications dated [dates] 2. ANTICIPATORY REPUDIATION: On [date], you communicated that you [will not/cannot] perform your obligations under the Agreement. [Quote specific statement if applicable.] This constitutes anticipatory breach under California law. 3. [Additional material breaches] Your breach goes to the essence of our Agreement. I have been completely deprived of the benefit of my bargain and have received nothing of value in exchange for my $[amount] payment. PRIOR ATTEMPTS TO RESOLVE I have made numerous good faith attempts to resolve this matter: - [Date]: [Describe communication/attempt] - [Date]: [Describe communication/attempt] - [Date]: Sent formal demand letter (copy enclosed) You have either ignored these communications or failed to cure. TERMINATION Due to your material breach, I hereby terminate the Agreement, effective immediately. DAMAGES Your breach has caused me the following damages: 1. Payment made for unperformed services: $[Amount] 2. Consequential damages: $[Amount] [Describe, e.g., "Lost rental income due to construction delay"] 3. Incidental costs: $[Amount] [Describe, e.g., "Cost of alternative vendor," "Storage fees"] 4. [Additional damages] --------------------------------------------------------- TOTAL DAMAGES: $[Total] FINAL DEMAND I demand that you pay the total sum of $[Amount] within SEVEN (7) DAYS of your receipt of this letter. NOTICE OF INTENT TO SUE If I do not receive full payment within seven days, I will file a lawsuit against you in California [Superior Court/Small Claims Court] seeking: 1. All compensatory damages in the amount of $[Amount] 2. Consequential and incidental damages 3. Prejudgment interest at the legal rate from [date of breach] 4. Attorney's fees and costs pursuant to [Contract Section/California law] 5. Any other relief the court deems appropriate I am fully prepared to litigate this matter. I have retained counsel and assembled all documentation necessary to prove my claims. This is your final opportunity to resolve this matter without litigation. After the seven-day deadline, I will file suit without further notice. Sincerely, [Your Signature] [Your Printed Name] Enclosures: - Copy of Agreement - Payment records/cancelled check - Copies of all communications - Prior demand letter dated [Date] - Evidence of damages
Enforcement Options & Remedies
1. Specific Performance
Equitable Remedy: Specific performance is a court order requiring the breaching party to actually perform their contractual obligations. It is an extraordinary remedy available only when monetary damages are inadequate.

When Available:

  • Unique Subject Matter: Real estate contracts (land is always unique), unique goods, rare items
  • Inadequate Monetary Remedy: When damages cannot adequately compensate for the loss
  • Valid, Enforceable Contract: Contract must be certain and definite in its terms
  • Plaintiff's Performance: You must have performed or be ready and able to perform
  • Feasibility: Performance must still be possible

When NOT Available:

  • Personal service contracts (cannot force someone to work for you)
  • When monetary damages are adequate
  • When enforcement would require ongoing court supervision
  • When plaintiff has "unclean hands"
2. Compensatory Damages (Benefit of the Bargain)

The primary remedy for breach of contract is compensatory damages designed to put you in the position you would have been in had the contract been fully performed:

Damage Type Calculation Method Example
Expectation Damages Value of promised performance minus value of actual performance Contractor promised kitchen worth $50,000; delivered kitchen worth $30,000. Damages: $20,000
Cost of Completion Amount needed to complete or correct the work Contractor left job unfinished; cost to complete with another contractor: $15,000
Diminution in Value Difference in value between promised and actual performance Used when cost to complete is disproportionate to the benefit
Restitution Return of payments or value conferred Paid $10,000 for services never provided; entitled to $10,000 return
3. Consequential Damages (Special Damages)

Consequential damages are losses that flow as a natural consequence of the breach:

  • Must Be Foreseeable: The damages must have been reasonably foreseeable at the time of contracting (Hadley v. Baxendale rule)
  • Lost Profits: Profits lost due to the breach (e.g., business lost during construction delay)
  • Additional Expenses: Costs incurred due to breach (e.g., hotel costs when house not completed on time)
  • Third-Party Claims: Liability to others caused by the breach
  • Limitation: Many contracts include clauses limiting or excluding consequential damages
Proving Lost Profits: Lost profit claims must be proven with reasonable certainty. You need documentation showing: (1) profits would have been earned absent the breach, (2) the amount of profits with reasonable certainty, and (3) the breach caused the loss. New businesses face a higher burden because they lack profit history.
4. Liquidated Damages

Many contracts include liquidated damages clauses specifying the amount of damages for breach:

  • Enforceability: Liquidated damages are enforceable if: (1) damages were difficult to estimate at contract formation, and (2) the amount is a reasonable forecast of actual damages
  • Penalties Void: If the liquidated damages clause is actually a penalty (punitive rather than compensatory), it is unenforceable under California Civil Code Section 1671
  • Consumer Contracts: In consumer contracts, the party seeking enforcement bears the burden of proving reasonableness
  • Commercial Contracts: In commercial contracts, the burden is on the party challenging the clause
5. Mitigation of Damages
Duty to Mitigate: Under California law, the injured party has a duty to take reasonable steps to minimize damages. You cannot recover damages that you could have reasonably avoided. Failure to mitigate reduces your recovery.

Examples:

  • If a contractor abandons a job, you must make reasonable efforts to find a replacement contractor (but you are not required to accept inferior work)
  • If a buyer breaches, you must make reasonable efforts to resell goods (and recover the difference)
  • If an employer breaches an employment contract, you must seek comparable employment
  • You can recover reasonable mitigation expenses even if mitigation was unsuccessful
6. Attorney's Fees

In California, each party generally pays their own attorney's fees unless:

  • Contract Provision: The contract includes an attorney's fees clause (if the contract allows one party to recover fees, California Civil Code Section 1717 makes it mutual)
  • Statute: A statute authorizes fee recovery (e.g., consumer protection laws)
  • Amount: Reasonable attorney's fees are recoverable; courts may reduce excessive claims
7. Interest
  • Contract Rate: If the contract specifies an interest rate, that rate applies
  • Prejudgment Interest: California Civil Code Section 3287 allows prejudgment interest at 10% per annum for damages that are certain or capable of calculation
  • Post-Judgment Interest: Judgments accrue interest at 10% per annum
8. Court Options
Court Jurisdiction Notes
Small Claims Court Up to $12,500 (individuals) No attorneys; faster process; informal; no jury
Limited Civil Court $12,500 - $35,000 Streamlined procedures; limited discovery
Unlimited Civil Court Over $35,000 Full procedures; full discovery; jury available
Collection After Judgment: If you win a judgment and the defendant does not pay voluntarily, you can pursue: wage garnishment, bank account levy, property liens, debtor's examination, and asset seizure. Judgments accrue 10% interest and are enforceable for 10 years (renewable for another 10).
Attorney Services
Need Help With Your Breach of Contract Case?

I help individuals and businesses resolve contract disputes, draft effective demand letters, negotiate settlements, and litigate breach of contract claims. Whether you are owed money, did not receive what you were promised, or are being wrongfully accused of breach, I can help you protect your interests and recover what you are owed.

How I Can Help
  • Contract Review: I analyze your contract to identify your rights, the other party's obligations, and potential claims or defenses
  • Breach Assessment: I evaluate whether a breach occurred, its materiality, and your available remedies
  • Demand Letter Drafting: I write detailed, legally compelling demand letters that cite specific contract provisions and maximize pressure for resolution
  • Damages Calculation: I help you identify and document all recoverable damages, including consequential damages and lost profits
  • Negotiation: I negotiate with the other party to achieve a favorable settlement without the cost and delay of litigation
  • Litigation: When necessary, I represent clients in small claims, limited civil, and unlimited civil court proceedings
  • Defense: If you are accused of breach, I defend your interests and assert counterclaims where appropriate
  • Judgment Collection: If you have a judgment, I pursue wage garnishment, bank levies, and property liens to collect
Common Cases I Handle
  • Contractor disputes (construction defects, abandoned projects, non-payment)
  • Business-to-business disputes (unpaid invoices, failed deliveries, service failures)
  • Real estate contract disputes (failed closings, deposit disputes, disclosure issues)
  • Service agreement disputes (professional services, consulting, ongoing services)
  • Purchase agreement disputes (goods not delivered, defective products, wrong specifications)
  • Partnership and business disputes (contribution failures, profit-sharing disputes)
  • Employment contract disputes (severance, non-compete, bonus claims)
  • Lease disputes (commercial lease breaches, early termination, security deposits)
When to Consult an Attorney
Consider consulting an attorney if:
  • The amount in dispute is significant (over $10,000)
  • The contract is complex or includes arbitration, choice of law, or attorney's fees clauses
  • You need to recover consequential damages or lost profits
  • The other party has an attorney or is a sophisticated business entity
  • You are considering or have received a lawsuit
  • You need injunctive relief or specific performance
  • Time is critical (approaching statute of limitations or performance deadlines)
  • You need help collecting on an existing judgment
Schedule a Consultation

Book a call to discuss your breach of contract case. I will review your situation, explain your legal options, and advise on the best strategy for resolving your dispute and recovering damages.

Contact Information

Email: owner@terms.law

Frequently Asked Questions
The statute of limitations depends on the type of contract. For written contracts, you have 4 years from the date of breach to file a lawsuit (Code of Civil Procedure Section 337). For oral contracts, you have only 2 years (Code of Civil Procedure Section 339). The clock starts running when the breach occurs, not when you discover it (with limited exceptions). If you miss the deadline, your claim is barred forever, so it is critical to act promptly.
A material breach is a significant failure to perform that goes to the essence of the contract and substantially defeats its purpose. If the other party materially breaches, you can terminate the contract, refuse further performance, and sue for all damages including the benefit of your bargain. A minor breach is a less significant failure where you still receive substantially what you bargained for. With a minor breach, you can sue for damages caused by the breach but must continue performing your own obligations. Whether a breach is material depends on factors like the extent of the injury, whether the breach was willful, and whether it can be cured.
The primary remedy is compensatory damages designed to put you in the position you would have been in had the contract been performed. This includes: (1) expectation damages (the difference between promised and actual performance), (2) consequential damages (losses flowing from the breach that were foreseeable, such as lost profits), (3) incidental damages (reasonable costs incurred as a result of the breach), and (4) restitution (return of any payments or value you conferred). You may also recover prejudgment interest and, if your contract has an attorney's fees clause, reasonable attorney's fees.
While California law generally does not require a demand letter before filing a breach of contract lawsuit, sending one is almost always advisable. A well-written demand letter can: (1) prompt the other party to pay or perform without the expense of litigation, (2) document your claim and the other party's refusal, (3) demonstrate good faith efforts to resolve the dispute, (4) establish the date from which interest may accrue, and (5) help you organize your evidence and arguments before filing. Some contracts specifically require notice and an opportunity to cure before you can terminate or sue.
Specific performance is a court order requiring the breaching party to actually perform their contractual obligations. It is an equitable remedy available only when monetary damages are inadequate to compensate for the loss. It is most commonly granted in real estate contracts (because every piece of land is unique) and contracts involving unique goods or rare items. Specific performance is generally not available for personal service contracts or when ongoing court supervision would be required. To obtain it, you must show: (1) a valid, enforceable contract, (2) your performance or readiness to perform, (3) inadequacy of money damages, and (4) feasibility of enforcement.
Under California law, the injured party has a duty to take reasonable steps to minimize damages after a breach. You cannot recover damages that you could have reasonably avoided. For example, if a contractor abandons your project, you must make reasonable efforts to find a replacement (though you do not have to accept inferior work or pay more). If a buyer breaches, you must make reasonable efforts to resell goods. However, you are entitled to recover the reasonable costs of your mitigation efforts, and you are not required to take extraordinary measures. Failure to mitigate can reduce your recovery.
In California, each party generally pays their own attorney's fees unless there is a contract provision or statute allowing recovery. If your contract includes an attorney's fees clause, California Civil Code Section 1717 makes that clause reciprocal, meaning either party who prevails in a contract dispute can recover fees regardless of how the clause is worded. The fees must be reasonable, and courts have discretion to reduce excessive claims. Review your contract for an attorney's fees provision before deciding whether to litigate.

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California Breach of Contract Law: Your Rights and Remedies

California contract law provides robust protections for parties who have been harmed by breach. When someone fails to perform their contractual obligations, you may be entitled to compensatory damages, consequential damages, specific performance, or contract rescission. The key is understanding your rights and acting within the applicable statute of limitations.

Key Elements of a Breach of Contract Claim

Steps to Enforce Your Contract Rights