AZ Common Law Causes of Action BREACH OF CONTRACT (2011)

• Jurisdiction: Arizona

BREACH OF CONTRACT

Elements

“A contract is a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.” Johnson v. Earnhardt’s Gilbert Dodge, Inc., 212 Ariz. 381, 384, ¶ 10, 132 P.3d 825, 828 (2006).

“To bring an action for the breach of the contract, the plaintiff has the burden of proving the existence of the contract, its breach and the resulting damages.” Graham v. Asbury, 112 Ariz. 184, 185, 540 P.2d 656, 657 (1975).

“Upon the breach of a contract, the party seeking relief has the choice of three remedies: rescind the contract, refuse to treat the breach as a termination of the contract and request that the court compel performance under the contract, or consider the breach to be a termination of the contract and request damages resulting from the breach.” West Pinal Family Health Ctr., Inc. v. McBryde, 162 Ariz. 546, 548, 785 P.2d 66, 68 (App. Div. 2, 1989).

Proof

“The party asserting the existence of a contract bears the burden of proof.” U S W. Commc’n, Inc. v. Ariz. Corp. Comm’n, 197 Ariz. 16, 22, ¶ 20, 3 P.3d 936, 942 (App. Div. 1, 1999).

1. Offer

“[A]n expression of intention to do something is not a promise.” Johnson Intern., Inc. v. City of Phoenix, 192 Ariz. 466, 472, ¶ 39, 967 P.2d 607, 613 (App. Div. 1, 1998).

“[W]here there is an express nonbinding clause, we will honor it and not look to surrounding circumstances to imply an obligation at variance with the express clause.” Johnson Int’l, Inc. v. City of Phoenix, 192 Ariz. 466, 473, ¶ 43, 967 P.2d 607, 614 (App. Div. 1, 1998).

“[E]ven if the parties anticipated making a written agreement, that fact alone does not preclude as a matter of law a jury finding that an oral contract was made.” AROK Constr. Co. v. Indian Constr. Servs, 174 Ariz. 291, 299, 848 P.2d 870, 878 (App. Div. 1, 1993).

See A.R.S. § 47-2201 et seq. for contract formation generally.

2. Revocation of Offer

“The revocation of an offer, however, must ordinarily be communicated to prevent an acceptance from changing it into a binding contract, and it is not communicated to the offeree unless it is actually brought to his knowledge.” Butler v. Wehrley, 5 Ariz. App. 228, 232, 425 P.2d 130, 134 (1967) (internal quotations omitted).

“An offer which is given without consideration to the offeror can be withdrawn at any time prior to the acceptance by the offeree.” Patton v. Paradise Hills Shopping Ctr., Inc., 4 Ariz. App. 11, 417 P.2d 382, 389 (1966).

3. Acceptance

“Mutual assent is ascertained from objective evidence, not from the hidden intent of the parties. Objective evidence includes written and spoken words as well as acts.” Johnson v. Earnhardt’s Gilbert Dodge, Inc., 212 Ariz. 381, 384, ¶ 11, 132 P.3d 825, 828 (2006) (internal citations and quotations omitted).

In determining whether terms of a contract are beyond the range of reasonable expectation, such that one party to the contract has reason to believe that the other party would not have accepted the agreement if he or she had known that the agreement contained the particular term, this “reason to believe” may be (1) shown by the parties’ prior negotiations, (2) inferred from the circumstances, (3) inferred from the fact that the term is bizarre or oppressive, (4) proved because the term eviscerates the non-standard terms explicitly agreed to, or (5) proved if the term eliminates the dominant purpose of the transaction, and the doctrine of reasonable expectations, and (6) requires drafting of provisions which can be understood if the customer does attempt to check on his or her rights, and the court is also required to consider (7) any other facts relevant to the issue of what the parties reasonably expected in this contract. Harrington v. Pulte Home Corp., 211 Ariz. 241, ¶ 19, 119 P.3d 1044 (App. Div. 1, 2005).

4. Consideration

“Under Arizona law, consideration necessary to modify an existing contract is any detriment to promisee, or benefit to promisor that supports the new promise. Moreover, legal consideration, like every other part of a contract, must be the result of agreement. The parties must understand and be influenced to the particular action by something of value [that is recognized by all parties as the moving cause.” Demasse v. ITT Corp., 194 Ariz. 500, 506-507, ¶ 20, 984 P.2d 1138, 1144-45 (1999) (internal quotationsomitted).

“One party to a written contract cannot unilaterally modify it without the assent of the...