734-359-7018
Now Accepting New Clients!
Blog

CONTRACTS 13: A party who first breaches a contract cannot maintain an action against the other party for his subsequent breach.

In July 2017, the parties entered into an agreement for plaintiff to purchase the assets of defendant, C Corp. The Asset Purchase Agreement stated: On the Effective Date, Plaintiff will submit to C Corp by wire transfer the sum of twenty-two thousand United States dollars.

Substantial Breach

It is undisputed that plaintiff did not make the required payment on the specified effective date of the Asset Purchase Agreement.

On July 30, 2017, plaintiff, informed defendant that he needed to open a bank account in the United States to enable plaintiff to make the $22,000 payment, which he intended to do on Tuesday, August 1, 2017. Defendant simply responded, great.

When payment still had not been received by August 9, 2017, defendants notified plaintiff that they were rescinding the agreement.

Action to Enforce

Plaintiff filed an action to enforce the agreement. Plaintiff argues that the timing of the specified payment was not crucial.

It is also undisputed that plaintiff had not established a bank account in this country to enable it to wire the money to C Corp before defendants rescinded the agreement. Even if plaintiff’s failure to pay the specified $22,000 amount on the stated effective date is not considered a substantial breach, there is no genuine issue of material fact that plaintiff substantially breached the agreement by failing to make any effort to make the specified payment for at least two weeks after the agreement’s stated effective date.

The trial court ruled that plaintiff’s obligation to pay the purchase price is a substantial term of the Purchase Agreement and that plaintiff’s failure to pay the purchase price when required is a material failure of performance.

Summary Disposition

Parties then filed cross-motions for summary disposition, the trial court denied plaintiff’s motion and granted defendants’ motion.

Given that C Corp had a limited period in which it was obligated to perform, the trial court did not err by finding that plaintiff’s failure to make the required payment on the specified effective date, or at any point in the following two weeks, qualified as a substantial breach of the parties’ agreement

A party claiming breach of contract must prove by a preponderance of the evidence that (1) there was a contract, (2) the other party breached the contract, and (3) damages resulted to the party claiming a breach. A party who first breaches a contract cannot maintain an action against the other party for his subsequent breach or failure to perform. This rule only applies when the initial breach is substantial.

Litigating Contracts

If you are a business owner facing litigation, obtaining the right legal representation is essential.

At Aldrich Legal Services, you will work with an attorney who has the extensive litigation experience necessary to help you reach an effective resolution that protects your interests.

Contact Aldrich Legal Services

Speak to a Pro: (734) 404-3000

FAMILY LAW 50: A Michigan Court has jurisdiction to make an initial custody determination when it is the home state of the child on the date of the commencement of the proceeding or within 6 months before the commencement of the proceeding.

PROCEDURAL HISTORY  Plaintiff and defendant have twin sons, but never married.  On August 13, 2008, the Court of Common Pleas Juvenile Division in Montgomery County, Ohio established plaintiff as the legal father of the children and...

When You Should Contest a Will?

Wills usually go through without a problem. Well over 90% of wills have no issue making it through probate. However, there are several grounds you may have to contest a will. As a beneficiary, or someone who would gain from a will, there are legal...

What You Need to Know About Distracted Driving

A great U.S. freedom is the ability to drive the open roads. However, every year there are more than 20,000 car accidents in Michigan. Many of these accidents come from distracted driving and could have been avoided. Distracted driving is such a...

Reasons Your Will or Trust Could be Contested

Everyone reacts in their own way when a family member passes away. Emotions can run high, and people can react more strongly than they normally would. Some family members may feel cheated by what a will or trust grants them leading them to contest...

Penalties For Driving Without Insurance in Michigan

Getting into a car and going for a drive isn’t perfectly safe. Driving on the Michigan roads can be dangerous. Driving those same roads becomes financially dangerous if you drive without car insurance. Between fees, charges, and possible...

PROBATE 36: Undue influence to execute Lady Bird deed.

This probate dispute between siblings arises out of the death of their father. Their father lived alone. In 2013, however, he asked appellee to live with him. She agreed, moving into the home in August 2013. Appellants allege that in the years...

Top 5 Most Common Traffic Violations in Michigan

Staying safe on the roads is in everyone’s best interest. However, keeping yourself or others out of danger is everyone’s responsibility. Getting a traffic ticket ends up costing drivers big time. Traffic tickets and citations cost money...

Don't let a bad decision, unfair contract, or a messy divorce get in the way of a promising future!
Contact the experienced team at Aldrich Legal Services today to schedule your free initial
consultation
and secure reliable and trustworthy representation today!
Get the Help You Need From a Team You Can Truly Count On: (734) 404-3000
734-237-6482
734-366-4405