Do I Have a Breach of Contract Claim?

The Four Elements — and the Defences to Each

A breach-of-contract claim in both Canada and the US turns on four elements: a valid, enforceable contract; the claimant's own performance (or a lawful excuse for not performing); a breach by the other side; and quantifiable loss caused by that breach. A claim is only as strong as its weakest element, so the assessment is really about evidence — can you prove the terms, and can you put a defensible dollar figure on the harm? Non-payment for delivered goods or services is the cleanest case because the loss equals the sum owed; quality and completion disputes are harder because the fight is over whether the work met the specification.

For the party accused, being sued is not the same as being liable. The standard defences mirror the elements: no enforceable contract formed, the claimant breached first or failed a condition precedent, performance was rendered or was excused by frustration or a force-majeure event, the claimant failed to mitigate, or the claimed loss is unproven or too remote. Oral contracts are generally enforceable, but the Statute of Frauds requires certain categories — land, goods over a threshold, agreements not performable within a year — to be in writing, and any oral term must still be proven through emails, texts, invoices, and conduct.

Damages Are Governed by the Contract's Own Clauses

The headline loss is rarely the recoverable amount. A liquidated-damages clause pre-sets the sum payable on breach: courts enforce it if it is a genuine pre-estimate of loss but strike it as an unenforceable penalty if it is punitive — so the clause can either guarantee or cap your recovery. A limitation-of-liability clause is even more consequential in commercial deals: caps on total liability and exclusions of consequential or lost-profit damages are generally enforceable between businesses, meaning your recoverable loss may be a fraction of your actual loss. These clauses must be read before anyone estimates the value of a claim.

The general measure of damages is expectation loss — enough to put the innocent party in the position they would have occupied had the contract been performed — reduced by any loss that could reasonably have been avoided. That mitigation duty is real: a claimant who sits on their hands instead of finding a replacement supplier, reselling goods, or re-letting capacity cannot recover the avoidable portion. Remoteness also limits recovery to losses the parties would reasonably have contemplated, so unusual or consequential losses may fall outside the claim entirely.

Forum, Process, and Deadlines

Where and how you can sue is often dictated by the contract itself. A mediation or arbitration clause generally must be followed — filing in court instead can get your case stayed or dismissed — and governing-law and venue clauses fix which jurisdiction's law applies and where. Many contracts also require written notice and a cure period before termination or suit, and skipping those steps can defeat an otherwise good claim. Identify these procedural requirements before you make a move.

Finally, every claim has a limitation period — commonly two years from discovery of the breach across most Canadian provinces, and varying by state and contract type in the US (often longer for written than oral contracts). Missing it bars the claim outright, no matter how strong. And even a winning claim is only worth pursuing if the defendant can actually pay, so weigh the claim size against the forum's cost, procedure, and the other side's collectability before committing to litigation — a well-drafted demand letter resolves many disputes without any of it.

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