Recent Answers to Collaboration Agreement Law Questions
Can a collaboration agreement be terminated if one party fails to meet their obligations?
Business Contracts
Collaboration Agreement
California
I am currently in a collaboration agreement with another individual for a joint business venture, where we agreed to share resources, responsibilities, and profits. However, it has come to my attention that the other party has consistently failed to fulfill their obligations as outlined in the agreement, such as not contributing their fair share of financial resources and not meeting project deadlines. This has caused significant delays and financial losses for me. I would like to know if I have the legal right to terminate the collaboration agreement due to their breach of contract and seek compensation for the damages incurred.
Dolan W.
I'm so sorry about this situation! The answer is yes. Under California law, a breach of contract occurs when one party fails to fulfill a legal duty the contract created and causes damages for the plaintiff. (California Civil Jury Instructions Number 303.) The measure of damages is the amount that will compensate the aggrieved party for all the detriment caused thereby or likely to result therefrom. (Cal. Civ. Code § 3300.) The law generally allows you to suspend your performance, much like if you stop paying your cell phone bill, your account is cut off. Also, any contract entered into after January 1, 1986 that does not stipulate the legal rate of interest, the obligation shall bear an interest rate of 10% per year after the breach. (Cal. Civ. Code § 3289.) This applies regardless of whether the agreement was written or done orally. Typically, the aggrieved party is entitled to be returned to the same position they were in before the breach. You have some options you can explore: You may want to consider just writing a formal demand letter. You can find it here - https://www.contractscounsel.com/t/document-form-checkout/119 You can file a lawsuit in your local court. If you’ve already sent a bunch of letters, then the truth is this is the only way to compel them to do anything. Best of luck! Dolan