WHAT IS "LITIGATION"? A controversy before a court or a "lawsuit" is commonly referred to as litigation.

If it is not settled by agreement between the parties it would eventually be heard and decided by a judge or jury in a court. Litigation is one way that people and companies resolve disputes arising out of an infinite variety of factual circumstances.

The term "litigation" is sometimes to distinguish lawsuits from alternate dispute resolution methods such as "arbitration" in which a private arbitrator would make the decision, or mediation which is a type of structured meeting with the parties and an independent third party who works to help them fashion an agreement among themselves. Now that we are more civilized, parties having a dispute they can not resolve among themselves, often engage attorneys to do legal combat in court, which generally avoids bloodshed. Instead of engaging in physical combat, the lawyers prepare the facts supporting their clients demands, send papers to the other side and present the facts at a "trial" to the decision maker, such as a judge, jury or arbitrator, for decision.

We use the term litigation to refer to the entire range of steps that are involved before, during and after an actual "trial". Criminal matters are also considered "litigation", and many attorneys who practice litigation handle both civil and criminal cases, as well as arbitration, mediation and handle administrative trials and hearings. However this section of Free Advice has as its focus disputes between private parties, between businesses between

themselves, and between individuals and businesses and the government, known as civil matters

Disputes can arise between two individuals, such as a disagreement between you and the contractor who remodeled your home with inferior material, or two drivers who are involved in an auto accident, or a couple contemplating a divorce. Litigation to resolve the dispute sometimes involves only individuals. In the construction case the litigation would determine if the remodeling was done properly, how much it would cost to do the job right, what damages you suffered because of the improper construction, and who owes what to whom. In the divorce case, the court would decide who gets what, how much support or alimony must be paid, and decide issues of child custody and visitation, if the parties do not agree and settle on their own.

Litigation also may be used to resolve a dispute between an individual and a business, perhaps over a defective product, or a lease of property, or between two businesses who may be having a dispute over patent rights or the terms of a contract between them.

Litigation sometimes involves disputes between an individual or business with a Government agency. Perhaps the town is trying to "condemn" some real estate you own in order to build a new school, or the state is trying to deny you a license, or youre having a dispute about the amount of taxes you owe the IRS.

There is no requirement that lawyers be involved in the settlement of disputes, even after a lawsuit has been filed. People and companies can resolve their differences informally. If they do, it is often helpful for such informal agreements to be reduced to writing. Where a lawsuit has been filed, if you agree to settle, the settlement agreements generally provide that the suit will be dismissed "with prejudice," which means that it cannot be re-filed. If the issues at stake are important, or a substantial amount of money is involved, it is a good idea to consult a lawyer, as inexperienced persons can inadvertently bargain away their rights.

Many cases can be handled rather simply and quickly and inexpensively, producing a very favorable outcome, through litigation. Sometimes, even in a complicated matter, just by starting litigation you will convince the other side you are serious, and motivate a quick settlement.

In cases that are not contingency cases, lawyers typically charge for their services by the hour. Youll should discuss the issues of cost with an attorney at the outset. While all litigation can be somewhat unpredictable, the attorney can give you an idea of what to expect based on his or her experience.

One bit of critical advice. If you, as a client, want to "win at all costs" or "show them" or "wear the other side down", litigation can become frightfully expensive and mentally taxing. Our advice is to select your objective carefully, in line with your budget, and review everything with an attorney.

WHAT IS A "CONTINGENCY FEE"? In some types of cases attorneys are willing to handle matters on a "contingency basis". In such a case you do not pay legal fees unless and until you win, and then the lawyer receives a percentage of your recovery as his or her fee. If you lose your case, there would be no legal fee at all for the lawyer.

A contingency fee arrangement is a method that allows many individuals who have been injured or seeking damages, such as those resulting from an auto accident or a medical malpractice case, to obtain legal representation even if they do not have money to pay a lawyer at the outset of a case.

As a general rule, accident and personal injury litigation is frequently handled on a contingency basis, commercial disputes rarely are, and criminal matters almost never are.

WHAT IS "ALTERNATE DISPUTE RESOLUTION"? Alternate dispute resolution, or "ADR" involves the use of mediation or arbitration, instead of or in addition to -- the courts, to resolve a controversy.

Those who favor ADR claim that the process is often faster, less traumatic,

and less expensive than traditional litigation, and can produce a better or fairer result. WHAT ALTERNATIVES ARE AVAILABLE INSTEAD OF FILING SUIT? The three most common alternatives to a formal trial are negotiation, mediation, and arbitration. Those favoring these techniques claim that the process is often faster, less traumatic, and less expensive than traditional litigation, and can produce a better or fairer result. Arbitration and Mediation are techniques that are discussed as subtopics of Litigation.

Because the results of a lawsuit are unpredictable (you may lose), and given the costs and difficulties of going to court, all lawyers first consider trying to settle the claim. There are three primary techniques used by the EPA:

1. negotiation: a voluntary and informal process, you would present your position to the other party with whom you are having the disagreement and the reasons why there should or should not be a settlement. If no settlement can be reached through private negotiation, other actions can be taken.

2. arbitration: more formal than mediation, this involves the use of an impartial third party who tells all parties how the matter will proceed. It may be binding or non-binding, as the parties decide at the start. (Nonbinding means that the arbitrators award can be disregarded and you can

proceed directly to court; binding means that arbitrators decision is legally final, no appeal is allowed, and enforceable in court.)

3. mediation: like arbitration, this involves the mutual selection of a neutral third party who listens to both sides, outlines issues, and helps both sides to seek an agreement that is acceptable to each. Unlike the arbitrator, the mediator does not have the authority to make a decision, although he/she may generate solutions as to how the dispute may be resolved.

ADR often will not produce the result you want. Sometimes it turns out to be far more expensive, more complicated, less predictable and take far longer than traditional litigation. For example, the courts, are paid for by everyones tax dollars, while the parties typically pay for ADR. Whether alternate dispute resolution makes sense for you in any particular set of circumstances is something that you must discuss with an attorney.

WE CAN'T REACH AN AGREEMENT OVER OUR DISPUTE, WHAT ALTERNATIVES ARE OPEN TO US? Litigation, arbitration and mediation are the three most common ways to resolve disputes.

Small claims court is a good way to deal with smaller cases (usually $1,000 to $5,000, depending upon the state).

If you want to litigate a larger case, it is generally a good idea to hire a

lawyer, because the rules of court are complex and critical mistakes are often made by those untrained.

Arbitration involves the appointment of a person, usually a lawyer or other professional, to act as the judge. Arbitration can work well for people representing themselves, as there are fewer rules and arbitrators generally will forgive technical defects.

Mediation is a structured meeting where people and companies try to resolve their differences. This can be a low-cost way to try to settle a case before substantial sums are spent on a lawsuit.

ARE LAWSUITS DIFFERENT FROM CRIMINAL CASES AND ARBITRATION?

Yes. Lawsuits are civil proceedings, as distinguished from criminal proceedings.

In criminal proceedings the State or Federal Government is seeking, on behalf of the people generally, to punish a person who engaged in conduct made illegal by a criminal statute. If the person accused of the crime or offense is found "guilty", s/he would be subject to possible fine or imprisonment.

Lawsuits are also different from methods of "alternate dispute resolution" such as "Arbitration" (in which a private arbitrator makes the decision), or "mediation" which is a type of structured meeting with the parties and an independent individual who helps the parties fashion an agreement among themselves.

HOW IS ARBITRATION, MEDIATION, OR A LAWSUIT STARTED? The first step in most controversies is to inform the other party that the controversy exists. Attorneys would refer to this as presenting a demand. In the demand, the aggrieved party tells the other party why s/he is responsible for the harm suffered. Some demand letters threaten a lawsuit. Other demand letters set forth the controversy, a proposed resolution, and an offer to submit the controversy to an arbitrator or mediator.

If informal negotiation between the parties fails to yield resolution, the aggrieved party may request that the other parties participate in either arbitration or mediation. Each party can then investigate for him/herself whether arbitration or mediation will satisfy his/her own objectives. If all parties agree, arbitration or mediation will be conducted.

The initial step in alternative dispute resolution is the selection of the arbitrator or mediator. Many professionals now offer their services as arbitrators or mediators and there are companies (such as American

Arbitration Association, End Dispute, Judicial Arbitration and Mediation Service) organized specifically to assist people resolve controversies. Once the arbitrator or mediator is selected, s/he tells all parties how the matter will proceed.

A lawsuit is started by filing a complaint in a court of law. Rules of civil procedure, whether established by federal, state or local law, and strict court formalities must be followed. Even in filing the complaint, there are strict rules, such as prior presentation of a demand letter, selecting the right court, exhaustion of all potential administrative remedies, and even the type of paper used, the margins and spacing of words on the paper, and the size of type that must be used. An attorney will assist you in adhering to the proper.

WHAT IS ARBITRATION?

Arbitration is the reference of a dispute to one or more independent third person(s) who act(s) as judge and jury. In advance of the arbitration, the parties agree to be bound by the arbitrator's decision. Cases that are arbitrated are generally resolved faster than conventional lawsuits because there is less bureaucracy and court congestion is not a problem. In an arbitration, witnesses are placed under oath and written evidence is

submitted, but the technical rules of procedure followed by a court do not apply.

WHAT BASIC STEPS ARE INVOLVED IN MEDIATION As with arbitration, the process starts by informing the other parties of the existence of the controversy. After failing to reach a settlement through private negotiation, the parties may agree to meet with a mediator in an effort to reach settlement. Mediation is an informal process where all parties participate in solving the problem. The mediator helps to identify, clarify, and discuss the events that led to the controversy. Mediation is centered on an educational process, where the mediator helps the parties to determine the facts of the situation, and to understand how similar matters have been resolved. The mediator tries to help the parties reach an agreement, but does not have the authority to compel participation in the process, and does not issue an award. The entire process is non-binding.

HOW LONG CAN I WAIT BEFORE I FILE A LAWSUIT? That depends. Some actions require prompt initiation of a lawsuit, while other matters can be given more time. Statutes of limitation exist in both the federal and state law system. If you file a lawsuit beyond the applicable statute of limitation, the defendant can demur (that is, file a pleading that basically says, "So what? The plaintiff waited too long and now recovery is barred by law"). In addition to the defense of the applicable statute of

limitation, a defendant may raise the "equitable argument of latches" (the plaintiff has been "sleeping" on his/her rights for so long that recovery should be barred).

There is generally a longer period of time for controversies relating to real property than there is for personal injury. Complaints regarding a written contract usually can be filed later than a complaint based upon an oral contract. Determining when the statute of limitation begins can be complex. Some limitations are based upon when a plaintiff should have known there was a problem. There are also rules regarding the tolling (suspension) of the statute of limitation (for example, the statute does not run while the defendant is out of state, is a minor, or is insane).

Just because there is a long period of time before a lawsuit must be filed does not mean that the period must be almost expired before filing. While other methods of dispute resolution can be used before filing, it is important not to allow a statute of limitation to expire, and thereby defeat any potential change for recovery. Remember the adage, "If you snooze, you lose." Determine the date of the applicable statute of limitation well in advance, and then don't get caught short. WHAT ARE TYPICAL STAGES IN A MATTER THAT GOES TO LITIGATION? THE INITIAL DEMAND -- Typically there is a dispute and one party will make a more or less informal "demand" of the other, who will then send a "response". This may lead to informal discussions. A lawyer can help you

assess whether what you are requesting or offering is realistic, and help you avoid making admissions that can hurt you if you cant agree on terms.

THE LAWYERS LETTER -- If the principals cant work things out among themselves, one party usually has an attorney send a "lawyers letter". While there may not be any legal significance to a lawyers letter, it usually gets a serious response from the other side, which may have been ignoring you. In some states it is necessary to make a formal demand before you can file suit, and the lawyers letter should do that for you.

THE PRE-LITIGATION SETTLEMENT DISCUSSIONS --There often is an informal "pre-litigation settlement discussion" involving the parties and their lawyers. Sometimes all it takes is a letter and phone call to straighten things out, particularly if the other side sees that you are serious.

FORMAL SUIT OR DEMAND FOR ARBITRATION -- If the informal attempts at resolution fail, formal action may be started, either by "filing suit" or a "demand for arbitration". The formal litigation is underway. There are strict time limits requiring that actions be taken within a set time frame or your right to sue may be barred by the "statute of limitations".

THE ANSWER Once the other party is "served" with legal process, it must provide its formal "Answer" within a prescribed time frame, or "default" and lose its case.

DISCOVERY -- Litigation may involve "pre-trial discovery" in which one or

both parties attempt to get evidence as to what happened, perhaps by taking the testimony of witnesses, or examining documents or physical evidence.

MOTIONS -- In litigation either side may make "motions" to try to narrow the issues, or compel the other side to do something, or even to have the court or arbitrator decide the matter without the need for a trial, as if all the facts are agreed to and only the application of the law to the facts is at issue.

JUDGES PRE-TRIAL CONFERENCE -- Before a trial the court or (in a large case) the arbitrator will typically order a "pre-trial conference" to narrow issues down still further, and perhaps to get the parties to agree to a settlement.

THE TRIAL -- Then comes the "trial", either by a judge alone, or with a jury to decide the facts and the judge to decide the law. In arbitration the "trial" is called a "hearing". By the way, despite the OJ trials, most trials are relatively dull, and only the parties, their attorneys, the witnesses and the judge and jury are present.

THE JUDGMENT -- After the trial the court will "enter judgment" such as "The plaintiff is entitled to recover $15,420." In an arbitration the arbitrator will issue an "award" and the victorious party will go to court for "confirmation of the award".

POST TRIAL MOTIONS AND APPEALS -- There may be "post-trial

motions" in which the losing party tries to convince the original judge that something else is appropriate, perhaps more money, or added relief. After that, there may be an appeal by the losing party to a higher court. An arbitration award is much more difficult to appeal than a courts decision.

COLLECTING THE JUDGMENT -- The victorious party may have received a judgment stating what he or she is entitled to recover. Then it is his or her job to collect the "judgment". Collecting judgments can be difficult, especially if the defendants assets are not easily located, or exempt from claims of creditors, as everyone is learning from the OJ civil case.

WHEN DOES THE CASE GET TO TRIAL? This is entirely up to the court and depends on the type of claim and the number of other cases that are pending. The time it takes to get to trial varies widely. Small claims cases are usually heard within 6 months of filing.

WHY IS "CIVIL PROCEDURE" DIFFERENT FROM "CRIMINAL PROCEDURE?" In criminal matters, action is taken by the "state" (either federal, state, or local government agencies) against an individual for a violation of the law. A criminal matter can result a sentence such as a fine, probation or time in jail. The sentence is imposed upon a defendant who pleads or is found guilty to keep him from acting in the same manner in the future and also to deter

others from acting in a similar manner. Since a criminal matter can result in the "state" taking away a person's freedom, there are additional constitutional protections built into the rules of criminal procedure.

In civil matter, the controversy is between two or more "people" ("people" can include individuals, businesses or government agencies). Most often, the result is an award of money to be paid by one party to the other. The judgment is imposed to make the aggrieved person "whole" for the harm that has been caused by the other. A judgment in a civil matter does not include the imposition of a criminal sentence.

The rules of civil procedure are different than that of criminal procedure because proceedings are different. WHAT BASIC STEPS ARE INVOLVED IN ARBITRATION? After all parties have been informed of the controversy, an agreement can be reached to resolve the matter through arbitration. The parties decide whether the arbitration will be binding or non-binding and then select the arbitrator. Usually the arbitrator is selected from a panel or list of available arbitrators. Once the matter has been submitted to the arbitrator (and when each side has paid his/her respective share of the arbitrator's fee), the arbitrator will contact all parties. A schedule will be set, which includes when all documents must be exchanged, when all witnesses must be disclosed, when arbitration briefs (written statements covering the facts and the law of the given controversy) are to be submitted, and where and when the hearing will be conducted.

At the arbitration hearing, each of the respective parties is allowed to present his/her evidence concerning the controversy. Opening statements can be presented, but are usually waived since arbitration briefs have been submitted. Witnesses (both percipient -those who saw and heard - as well as experts) are examined and cross-examined. Documents and other evidence are submitted. Closing arguments may be presented.

Once all evidence has been submitted to the arbitrator, the matter is taken under submission. This means that the arbitrator will take some time to consider all of the evidence that has been presented. After carefully review, the arbitrator will make an "arbitrator's award." After the arbitrator's award has been issued, the prevailing party often has the ability to have it issued as an enforceable order of a court of law

WHAT IS A CONTRACT?
A contract is an agreement between two or more persons (individuals, businesses, organizations or government agencies) to do, or to refrain from doing, a particular thing in exchange for something of value. Contracts generally can be written, using formal or informal terms, or entirely verbal. If one side fails to live up to his/her/its part of the bargain, there's a "breach" and certain remedies for solving the differences are available. The terms of the contract - the who, what, where, when, and how of the agreement - define the binding promises of each party to the contract. WHAT ARE THE KEY ELEMENTS OF A BINDING CONTRACT? Competent Parties - For a contract to be valid, each side must have the capacity to enter into it. Most people and companies have sufficient legal competency. A drugged or mentally-impaired person has impaired capacity

and chances are a court may not hold that person to the contract. Minors (e.g., usually those under eighteen) cannot, generally, enter into a binding contract without parental consent, unless it is for the necessities of life, such as food, clothing, or for student loan contracts. Consideration - If the other side is to be held to the contract, you must give up something in exchange. This is called consideration. No side can have a free way out or the ability to obtain something of value without providing something in exchange. Money is the most common form of compensation, but it can also be property, giving up a right or valid claim, making a promise to do or not to do something, or anything of value. Agreeing to perform an illegal or illicit act is not consideration and the contract is void. Mutual Assent or Meeting of the Minds - This means that each side must be clear as to the essential details, rights, and obligations of the contract. Putting the deal down on paper prior to signing it goes A LONG way to avoid future misunderstandings and disputes. Meeting of the minds sometimes can be expressed by words spoken or gestures made or can be inferred from the surrounding circumstances. There is no meeting of the minds if: (1) one side is obviously joking or bragging, (2) there is no actual agreement (i.e., the farmer who is selling a gelding and the buyer thinks the horse is a brood mare), or (3) both sides have made a material mistake as to the terms or details of the contract. When you ask someone to do something, or offer to see someone for a price, you are making an offer. An offer is the first step in forming a contract. The middle step is the other party's acceptance of the deal. The last step is performance -- where you each live up to your side of the bargain. Words, gestures, or actions can signal an offer to enter into a contract and an acceptance. If you are forced to make an offer ("your money or life") it is not a valid offer. Similarly if you are tricked into accepting, it will not be deemed acceptance of the terms offered. To have a binding obligation on both sides, both sides must approve and accept the terms and conditions of the offer. Offers remain open until: (1) accepted, (2) rejected, (3) retracted prior to acceptance, (4) countered, or (5) expired by their own terms.

If you reject an offer, you have no contract unless at a later date a new offer is put on the table (called a "counter-offer"). A counter-offer is a new set of terms and conditions given in response to the original offer. The difference between the original offer and the counter-offer may be just one clause in particular or multiple provisions or the entire contract. Be mindful that you can take back or withdraw an offer at any time before the other side has agreed to the deal. This is called retraction (proving that you have withdrawn the offer before the other side accepted may present a problem). On the other hand, changing your mind after you have signed or agreed precludes retraction. Absent compelling reasons for not holding up to your end of the bargain, you will be a party to a contract.

WHAT IS THE PERFORMANCE OF A CONTRACT?

Performance is actually completing the deal according to the terms given in the contract. For example, you want to buy that snazzy looking 1998 Ferrari at your local dealer's clearance sale. Your dealer, Mr. X, offers to sell you that slick-looking Italian car if you pay him $97,000. After a bit of bargaining, you agree to the terms and get the car at a reduced price of $96,995, signing on the dotted line. A contract has been accepted. Mr. X, your car dealer, will deliver the 1997 Ferrari and then you pay him the balance due. The dealers delivery of the car and your payment of $96,995 are the performance of the contract. Both parties must live up to their end of the bargain in the contract to have closure. In other words, until both parties have properly performed under the contract, the contract remains open.

ARE THERE DIFFERENT KINDS OF ACCEPTANCE?

Yes. Acceptance typically can come in one of three types: (1) Express - a direct and absolute outward manifestation of agreement, such as, "I accept your offer."

(2) Implied - the acts of the parties show that the offer has been accepted, such as when both parties to a contract begin to perform the terms of the contract. (3) Conditional - acceptance is conditional on the happening of something, such as, "I accept your offer so long as you trim my tree in the next two days." By its terms, a conditional acceptance is a counter-offer.

MUST THE CONTRACT BE IN WRITING? That depends primarily on the nature and subject matter of the contract. If you orally agree to purchase your brother's 1988 Ferrari that is in "mint condition" for $25,999.99, that agreement is legal. As a general rule, however, it is wiser to have the terms written in understandable language plain English -- to save future misinterpretations and errors. Most states have laws (called "Statutes of Frauds") listing the types of contracts that must be written in order to be enforceable. The purpose of the Statutes of Frauds is to prevent fraudulent claims from arising. Although the laws vary from state-to-state, the most common examples of contracts that generally must be in writing are: sales of real property; promises to pay someone's debt obligations; a contract that takes longer than one year to complete; real property leases that run for more than a year; contracts for an amount or other consideration that exceeds the state's threshold; a contract that will go beyond the lifetime of the one performing the contract; the transfer of property upon the death of the party performing the

contract.. If you agree verbally to a type of contract listed in your state's Statutes of Frauds without getting the agreement in writing, the contract is not enforceable, although there are some exceptions. Because state laws vary in this area, it is strongly suggested that you consult with your attorney if only to review the proposed contract. Do not wait until after you have signed. That can be too late.

IM LOOKING TO RENOVATE MY KITCHEN AND BATHROOMS COMPLETELY. WHAT CLAUSES SHOULD I INCLUDE IN THE CONTRACT TO PROTECT MY LEGAL RIGHTS?
You should insert a clause allowing you to withhold payment if the renovations are not done completely or correctly. You should also have other clauses, including one stating that you may withhold payment if a subcontractor or materials supplier files a lien or claim against you.

WHAT DO I LOOK FOR IN THE CONSTRUCTION CONTRACT TO PROTECT ME FROM DELAYS?

If youre a homeowner, youll want to provide a penalty, perhaps the right to withhold progress payments, if the builder does not complete the job by a certain date. If you own land zoned for commercial building use, then you would want the right to withhold the final payment until the building department issues a certificate of occupancy.

CAN I CHANGE MY MIND AFTER ENTERING A CONTRACT?

That largely depends on the nature of the contract. As a practical matter, many local merchants will have "return" policies that permit a buyer to return unused merchandise within a certain time for a full return with no questions asked. Some states have laws giving consumers the right to return merchandise within 7 to 14 days, unless the store predominately posts a "No Return" or "Final Sale" notice.

If the contract involves home repairs, you also have the right to change your mind, typically within 72 hours from signing the contract. The FTC and many states also have "cooling-off" laws involving major purchases, such as new cars. WHAT ARE THE TYPICAL TYPES OF LAWSUITS? The most typical are: (1) Tort (typically "Negligence") Actions: A "tort" is a civil wrong. Say you were injured crossing a street by a driver speeding through the red light. You have incurred pain and suffering, medical and physical therapy expenses, and you missed work, using 20 days of sick leave. The drivers insurance company offered to pay only the doctor bills and you are unsatisfied with the proposed settlement offer. You can file a tort action against the negligent driver in an effort to recover for both the out-of-pocket costs and the physical or emotional injuries you suffered. Tort-based lawsuits are frequently brought for injuries sustained as a result of negligence, defective products, medical malpractice, unsafe premises, unsafe products. (2) Contract Actions: You paid a supplier to deliver merchandise. The goods were defective. You want your money back. Or you paid a contractor to repair your leaky roof and after constantly badgering him to finish the job, hired someone else to do it. You want to "sue the tar out of him" but at least recover what it cost you to have someone else do the job. You can file a civil action claiming breach-ofcontract. (3) Actions: The typical divorce and custody and support cases.

(4) Private nuisances: The proverbial "neighbors dog incessantly howling day and night and the neighbor does nothing" story. You file a lawsuit to force you neighbor to do something about his/her howling mutt. Although there are over a million of them filed each year in Federal Bankruptcy Court, bankruptcy matters are not really lawsuits. There is no plaintiff or defendant although there may be claims raised in Bankruptcy Court that resemble lawsuits.

WHEN DOES A BREACH OF CONTRACT OCCUR? If one side fails to stick to her/her/its part of the bargain, there is a breach. A breach occurs when: one party to a contract makes it impossible for the other parties to the contract to perform; a party to the contract does something against the intent of the contract; or a party absolutely refuses to perform the contract. Not all breaches of contract are necessarily "contract killers" which would end up in a lawsuit. Much would depend on whether the breach is "material" or "immaterial" and who the parties are. If the breach is immaterial, you may have the option to: ignore or excuse the defect and continue on as if nothing occurred, point out the problem to the responsible side and give it/she/him an opportunity to fix it, refuse to pay anything more until it is fixed, or correct the work yourself and deduct the cost from any payment.

What makes sense for you will depend on the facts. Where the matter is substantial, the advice of an attorney can help you.

WHAT ARE MY REMEDIES IN THE EVENT THERE IS A BREACH?

Although much more information is contained in the section on remedies, you may have a choice of remedies: (1) Compensatory Damages - money to reimburse you for costs to compensate for your loss. (2) Consequential and Incidental Damages - money for losses caused by the breach that were foreseeable. Foreseeable damages means that each side reasonably knew that, at the time of the contract, there would be potential losses if there was a breach. (3) Attorney fees and Costs - only recoverable if expressly provided for in the contract. (4) Liquidated Damages - these are damages specified in the contract that would be payable if there is a fraud. (5) Specific Performance - a court order requiring performance exactly as specified in the contract. This remedy is rare, except in real estate transactions and other unique property, as the courts do not want to get involved with monitoring performance. (6) Punitive Damages - this is money given to punish a person who acted in an offensive and egregious manner in an effort to deter the person and others from repeated occurrences of the wrongdoing. You generally cannot collect punitive damages in contract cases. (7) Rescission - the contract is canceled and both sides are excused from further performance and any money advanced is returned. (8) Reformation - the terms of the contract are changed to reflect what the parties actually intended.

Bear in mind that it often makes sense for both parties to directly negotiate a settlement for a breach. However, if the matter involves a significant amount of money, a wise option would be to retain an attorney to help you propose settlement terms and to review any proposed settlement in advance. Other alternatives for dispute resolution include mediation and arbitration. These avenues for obtaining a remedy may be more cost effective than simply filing a lawsuit and letting the court settle the dispute.

WHAT ARE THE DEFENSES TO A CLAIMED BREACH OF CONTRACT?

There are many valid defenses that can be raised to a claim of breach of a contract. Depending upon the particular facts and circumstances of the contract and the actions of the parties, an attorney can advice you of what makes sense. Going it alone is not the wisest choice and legal help is almost a certainty. The more common defenses to a breach of contract claim are: (1) One side was not competent to enter into the contract, either due to age or mental illness; (2) One side had a "free way out" and really never provided any form of "consideration"; (3) One side was under pressure and duress or other undue influence to sign; (4) One side engaged in "fraud" to procure the contract; (5) One side prevented the other from fulfilling its/her/his end of the bargain; (6) The original contract was changed with the agreement of all parties; (7) There was a mistake of fact or mistake of law prior to signing the

contract; (8) The contract has an illegal purpose or act; (9) Something happened, through no fault of either side, making the duties under the contract impossible to perform; (10) The side claiming the breach accepted the performance without claiming a breach had occurred.