What a Business Can Do Upon a Breach of Contract
February 18, 2015
Contracts are a large part of owning a business. Most every company has some type of contract whether its with another business entity, a customer, or an employee. Contracts are legally binding documents, meaning trouble arises if one party breaches, or violates, the terms of the deal.
Currently, Uber Technologies is involved in a lawsuit regarding its alleged deception of customers and how it shares tips with drivers. Uber is a driving service whereby customers book a car through a smart phone app. Clients can pay their fare through PayPal, including adding a tip.
Uber Technologies is currently being sued in federal court.
Recently, U.S. Magistrate Judge Donna Ryu ruled that the plaintiff in the lawsuit against Uber is entitled to emails from Uber’s chief executive and its global operations chief.
The lawsuit itself is being brought by Uber clients who are accusing Uber of falsely advertising that a 20 percent gratuity on fare is automatically added for the driver. However, the company actually retained a substantial portion of that gratuity for itself. According to clients involved in the suit, this automatically-added gratuity caused drivers to return more funds to Uber than they should have, which is alleged as a breach of contract and a violation of California’s consumer protection laws.
What Is Breach of Contract?
A breach of contract occurs when a party to a binding agreement, in this case a contract, does not honor their part of the deal either by not performing what they promised, or interfering with the other party’s performance of what was promised.
A contract can be breached by a party:
- Stating it will not fulfill its contractual promise
- Acting in such a way that show it will not fulfill its promise
- Conduct that shows the other party to the contract that the entity will be unable to fulfill its end of the deal
Breaches of contract happen all the time, unfortunately. When this happens, your business needs to consult an experienced business litigation attorney who has handled many breach of contract cases.
Our attorneys at Arata, Swingle, Van Egmond & Goodwin has had years of expeirnece handling disputes between businesses. We work tirelessly up uphold the rights of our clients and use every resource at our disposal to do so. We understand that a contractual breach can be seriously damaging to a business, large or small, and we want to help in any way possible.
For an initial consultation, we welcome your call to our office at 209-522-2211.