So your contract has been breached – now what?
Written By: Stephanie Pan, Associate
You had an agreement with someone, but they’ve fallen through on their end of the deal. Whether the details of your agreement have been written or not, there are steps you can take to try and recover any money you lost from their actions, or inactions.
Send a Demand Letter
Before suing, you may give a written demand letter to the other party. This demand letter should include:
- Date, name, and address of the party it was sent to;
- the reasons why the money is owed;
- a deadline to settle or make payment to you;
- a statement that, if they do not pay or settle, you might file a Claim with the Courts.
In some instances this process works, and you will not need to take the matter to Court. Remember to keep a copy of the letter in the event you need to file a Civil Claim and a trial becomes necessary.
Consider the Cost
If a demand letter is not successful, you may decide to sue in Court. Pursuing a Court action will take time, effort, as well as expenses, and these should be considered carefully before starting the process.
Time: You will be required to go to the Courthouse during business hours to file your Claim, and will also have to attend all Court hearings and trial dates. If you have to take time off work, you will not be able to include your lost wages in the amount that you are suing for.
Effort: You will need to complete all of the forms, and learn and follow proper Court procedures.
Expenses: They may include, but are not limited to:
- Filing fees (can be up to several hundreds of dollars);
- Expenses to serve the Claim upon each Defendant; and
- Potential expenses related to Court Applications, Witnesses or Interpreters and any additional costs awarded against you by the Court.
In some instances, you can apply to waive the filing fee if you provide financial documents with your application that show you cannot afford to pay. At the conclusion of the matter, if you are successful, the Court might award costs for your time and efforts spent to pursue your claim.
In Provincial Court Civil you can sue for an amount up to $50,000 plus interest and costs. If your Claim is for more than $50,000 you can choose to drop the extra amount, referred to as abandonment, or choose to sue for the full amount in the Court of Queen’s Bench.
If your Claim is on behalf of a corporation, you are not allowed to self-represent and must have legal representation in the Court of Queen’s Bench.
Be Aware of Time Limits
In many cases, you cannot sue after a certain period of time has gone by. This is called a limitation period. For debt claims, such as breach of contract, the time limit is generally two years from the time the debt began.
An exception is where the Defendant has acknowledged in writing that the debt is still owing or if a partial payment has been made. In this case, the two-year limit starts when the debt was last acknowledged or partially paid.
Time limits are a complex area of law and you should consult a lawyer if there is any doubt about the limitation period affecting your case.
Do you know where the Defendant is?
You will need to serve your Claim on the Defendant. The Court does not assist you in locating a Defendant.
Are you prepared to be involved in a lawsuit that potentially lasts for years?
The amount of time to get a judgment varies based on the type of claim, how quickly you can serve the Defendant, and whether or not the Defendant disputes the Claim.
Generally, if a Defendant chooses not to file a defence, it is possible to obtain a Default Judgment in less than 45 days from the date the Claim is filed, where the Defendant is served immediately with the claim.
If the Defendant files a defence, the amount of time varies to get a Judgment and depends on steps taken by the parties, and can go on for several months, or even years.
If you are successful in receiving a Judgment, will you be able to collect?
The Defendant may not have money or assets now, but financial situations can change. A judgment is valid for 10 years.
Any Claim must be supported by evidence, and decisions are made based on this evidence. If it is just your word against that of the other person, the Court may have a difficult time deciding in your favour.
Evidence can be in the form of documents, such as letters, bills, contracts, leases, etc. You do not need evidence when filing your Claim. Having witnesses who can testify about what happened may also be helpful in proving your case, but the Court does not have to believe what a witness says. Whether or not the Court finds a witness believable can play an important part in the final decision.
Getting a Judgment is not the end of the Court process. If the Defendant does not voluntarily pay you the amount awarded in the Judgment, you must then take steps to enforce the Judgment.
The Court does not pay the amount awarded in the Judgment to you and does not assist in enforcing the judgment for you.
There is also no guarantee of collecting the money from any Judgment granted by the Court. If the party you are suing does not have any money, assets or a job, you may not be able to collect your judgment. However, a judgment is valid for 10 years and financial situations change. Consider all of this when you decide if you want to sue.
Parlee McLaws is a large, multi-service law firm with expertise across a variety of service areas. Our skilled lawyers and agents bring years of experience to their work on behalf of clients in a broad range of industries.
The knowledgeable lawyers and staff at Parlee McLaws LLP understand the complex risks of contract issues, whether it’s a small verbal agreement or a multi-million dollar written contract. We handle almost all types of contractual relationships, and we can advise and help draft important documents to make expectations clear and eliminate as much risk as possible. We can also represent you in any litigation or other dispute resolution that may be needed, should a dispute arise.
With offices conveniently located in both Calgary and Edmonton, the team of professional and experienced lawyers at Parlee McLaws LLP has the experience and technical knowledge to provide you with the legal advice needed in today’s constantly changing world. We understand the number of moving pieces involved in contractual relationships and are dedicated to resolving issues efficiently. Contact us to discover how we can help you today.
Disclaimer: This article is to be used for educational and non-commercial purposes only. Parlee McLaws LLP does not intend for this article to be a source of legal advice. Please seek the advice of a lawyer before choosing to act on any of the information contained in this article.