Legal Question in Business Law in California

Re: Breach of contract by

What is deemed "material" and "harmful" would ultimately be determined by a Judge, Jury, or Arbitrator if a lawsuit arose from this situation.

If you initiate a lawsuit against the company for breach of contract, you will have the burden of proof "by a preponderance of the evidence." To use a football analogy, you have to advance the ball past the 50 yard line to succeed.

It is very likely your contract with the company calls for either mediation and/or arbitration of any grievances. If you refuse to negoiate with them, then basically your recourse would be to:(1) Initiate the mediation or arbitration process, if your contract calls for it; or, if it does not, (2) Initiate a civil lawsuit for breach of contract and money damages.

Depending on how much money is at stake, you might want to consult with an attorney privately to discuss your situation further.

Good Luck.

Re: Breach of contract by

It appears to me that your company is unlawfully trying to force you to renegotiate a valid contract. Contract modifications are generally invalid if as a result of duress or fraud--forcing changes to a contract unfairly.

"Material harm" is really something that would have to be determined in court, mediation, or arbitration. Your idea of "material harm" in your industry and work environment would be different from someone else's idea of "material harm" in a different industry or work environment. You don't give enough facts for me to know whether you or the company are at fault for breach.

The burden of proof for either party would be to prove your point by the "preponderance of the evidence." In other words, the jury would have to believe your version of events more than your opponent's.

For an attorney to take up this matter, you would have to have the resources to pay as you go, or your employment contract would have to award attorney's fees to the prevailing party, or your "damages" would have to be substantial. There are many if's that depend on the facts.

If you need further assistance, I would be happy to consult with you.

Best of luck,

Sergio Benavides

www.benavideslawfirm.com

Re: Breach of contract by

Whether or not the company will be able to prove a breach of contract based on the material damage and willful fraud provisions will turn on many different factors. They are either going to have to provide facts showing you wilfully broke the contract or are going to have to use another part of the contract to argue that wilfullness isn't necessary. That may be difficult for them to show. If they fail to honor the contract, your remedy is probably to sue. Feel free to contact me if you would like to discuss this further; I am in the Los Angeles area.

Re: Breach of contract by

I respectfully disagree with the previous answer. While the standard of proof is indeed "preponderance of the evidence" (more than 50% likely) rather than "clear and convincing" or "beyond a reasonable doubt," the burden of proof doesn't fall on you, it falls on the other party, which must establish by admissible evidence that you committed breaching acts ("willful or intentional fraud or other misconduct") and that material harm resulted from that misconduct.

In addition to whether there is a mediation or arbitration clause, an attorney advising you would want to know whether the contract contains an attorney-fee clause. A clause requiring either party to pay the other's attorney fees will be interpreted to have bilateral effect in California; e.g., the prevailing party can recover its fees and costs. Since you seem to have a strong case, the presence of such a clause would be encouraging, since it gives you more clout in settlement talks and may help induce an attorney (like me) to take your case on a substantial contingency basis.

Re: Breach of contract by

I agree with what Messrs. Stevenson, Benavides and Mickelson have said.

There is another factor you need to bear in mind. Your question says that you are in Arizona but that you believe California law applies. (I infer from this that the company is in California.) This may or may not be the case.

Your contract probably says which state's laws apply and where any dispute would have to be brought to court. If so, you are probably stuck with what it says.

If the contract is silent on this point, it may be possible for the case to be filed in either Arizona or California. It is also possible that only one of you would have this option and that the other would be limited to one state or the other.

In a situation like this, it may matter who files first. One reason is that the party that sues will bear the burden of proof. But there are other, more subtle reasons.

The laws of one state might be much more favorable to you (or to the company) than the laws of the other. To pick but one example of how this might be, it is possible that the limitations period has expired in one state but not in the other. It is also possible that one state would enforce a mandatory arbitration clause while the other would not.

The strength of your case may depend quite heavily on who sues first and where. Letting the company file first may work to your advantage. Or it might be better for you to file first -- and perhaps only in one of the two states.

Another concern is whether it will be too difficult or expensive to litigate in California instead of Arizona. Filing first may make life a lot easier on you, though other factors may be more important.

Keep in mind that the company may have already considered these issues. If it thinks it will benefit by letting you sue first, it might just be trying to bait you into doing so.

You should consult with a lawyer ASAP. If both sides have an incentive to file first and you delay, you could end up at a serious disadvantage.

Feel free to contact me directly if you want to discuss this further.