Contract Disputes

A breach of contract claim in California requires four things: a valid contract, the plaintiff's own performance (or an excuse for not performing), the defendant's breach, and damages caused by that breach. That sounds simple. In practice, most contract disputes turn on which of those four elements is actually contested, and that's usually not "did a contract exist" but whether a given failure to perform actually breached it, and what it's worth.

TencerSherman LLP represents both plaintiffs and defendants in California contract disputes: businesses trying to enforce an agreement someone else walked away from, and businesses defending against a breach claim they believe is overstated, excused, or simply wrong on the facts.

What counts as a breach

A breach doesn't have to be a flat refusal to perform. The most common fact patterns TencerSherman sees are:

• Nonperformance. One party simply doesn't do what the contract required.
• Defective performance. The work or goods delivered don't meet the contract's specifications.
• Late performance. A deadline in the contract gets missed, which is only a breach if time was a material term (a "time is of the essence" clause makes this explicit, but courts will sometimes find a deadline material even without one).
• Anticipatory breach. A party states in advance, or acts in a way that makes clear, that it won't perform, letting the other side treat the contract as breached before the performance date even arrives.
• Repudiation of specific terms. A party performs generally but refuses a specific obligation, like a non-solicitation clause or a warranty term.

Courts also distinguish material breaches from minor ones. A material breach excuses the other party's own further performance and supports a full damages claim; a minor breach usually doesn't excuse performance but still supports a claim for the actual loss it caused. Whether a given breach is material or minor is a fact-specific question that often decides the whole case.

What you can recover

California contract damages are governed by Civil Code section 3300: the goal is to put the injured party in the position they would have been in had the contract been performed, not to punish the breaching party. That's a meaningful distinction from tort law. Punitive damages, available in fraud or business tort claims, are not available for a straight breach of contract under Civil Code section 3294, which limits exemplary damages to non-contractual claims.

Available remedies typically include:

• Compensatory damages: the direct financial loss caused by the breach, plus, in some cases, consequential damages that were foreseeable at the time the contract was signed.
• Specific performance: a court order requiring the breaching party to actually perform, available under Civil Code section 3386 in limited situations, generally where money damages wouldn't adequately compensate the loss, such as contracts involving unique property.
• Rescission: unwinding the contract entirely and returning both parties to their pre-contract position, typically available where the contract was induced by fraud or mistake.
• Attorney's fees: recoverable only if the contract itself has a fee-shifting clause, or a specific statute provides for it. California doesn't award attorney's fees in ordinary breach of contract cases absent one of those.

How long you have to bring a claim

California's statute of limitations for breach of contract depends on whether the contract was written or oral:

• Written contracts: four years from the date of the breach, under Code of Civil Procedure section 337.
• Oral contracts: two years from the date of the breach, under Code of Civil Procedure section 339.
• Contracts for the sale of goods: four years under California Commercial Code section 2725, regardless of whether the contract was written or oral. See the commercial litigation and arbitration page for how UCC transactions differ from general contract disputes.

These deadlines generally run from the date of the breach itself, not from when the damage became apparent, so waiting to see how a dispute develops before consulting counsel can quietly cost you the claim.

Frequently asked questions