Thank you for that.
An agreement must contain four essential elements to be regarded as a contract. If any one of them is missing, the agreement will not be legally binding.
3. Intention (meeting of the minds)
4. Consideration (fair value exchanged)
For breach of a contract, there is a material breach (goes to the very heart of the matter) and an immaterial breach (money damages will help compensate the plaintiff).
In cases of material breach, the party not in breach may revoke their acceptance, so goods/payment are returned.
For immaterial breach, the plaintiff is compensated by the defendant paying for the damages (ie cost of repair).
So there is something called "partial performance" where one party only performs a portion of the contract (ie the business plan). Partial performance is considered by evaluating the following factors:
- The extent the injured party receives benefit under the contract that the injured party has reasonably anticipated;
- The extent the injured party may be compensated for the damages incurred because of the breach of the contract;
- The extent the breaching party has already performed or has made preparations for performance.
- The level of hardship on the breaching party;
- The willful, negligent or innocent failure to perform by the breaching party;
- The level of uncertainty that the breaching party will perform the contract.
(Credit card disputes are usually limited to those opened within 60 days of the payment; but that varies by credit card issuer).
So in a partial performance case, the court will try to determine what, if any, compensation the breaching party would be entitled to. For example, would a business plan be worth $8,000, or was that paid in anticipation of future work?
If it is necessary to hire a third party to compose a new business plan because this one is not satisfactory, then that could be cause for the court to void the entire contract.
As for future payments, if no services are rendered, there would be a breach and thus no obligation to pay future payments.
There is anticipatory repudiation that covers that issue and this is codified; please see the civil code below:
1439. Before any party to an obligation can require another party to perform any act under it, he must fulfill all conditions precedent thereto imposed upon himself; and must be able and offer to fulfill all conditions concurrent so imposed upon him on the like fulfillment by the other party, except as provided by the next section. 1440. If a party to an obligation gives notice to another, before the latter is in default, that he will not perform the same upon his part, and does not retract such notice before the time at which performance upon his part is due, such other party is entitled to enforce the obligation without previously performing or offering to perform any conditions upon his part in favor of the former party.
So generally, because there are ongoing issues it is best to retain an attorney to write a demand letter, requesting a refund for monies paid (deducting the reasonable value of services rendered to date, if any) and a written agreement terminating the contract.
If one wishes to pursue the underlying business venture, however, and retaining another individual in the same capacity would cost more (of comparable experience, reputation, etc), then the plaintiff may sue for the "benefit of the bargain" - ie the difference between the cost of this contract, and the new replacement contract - so that plaintiff is made whole by defendant's breach.