Updated November 19, 2020:

A breach of contract federal law is when a contract governed by federal law has been breached. In most of these cases, the plaintiffs are citizens of one state and the defendants are citizens of another state. Whether or not a matter crosses state lines is one factor that determines whether the issue can be resolved at the federal or state level.

Every party that is part of the agreement concurs to implement the stipulations outlined in the contract. When a breach of contract occurs that signifies that one of the affiliated parties involved in the contract didn't hold up their end of the agreement. If this takes place, then the party that didn't breach the contract has the option to file a lawsuit and ask for legal and financial relief.

Actions the Plaintiff Can Take in a Breach of Contract Lawsuit According to Federal Law

If the breach of contract is a federal issue, the aggrieved party can initiate a lawsuit with the federal court that is in:

  • The defendant's resident state
  • Any state where the defendant has the minimum contacts required
  • The state where the contract was signed or negotiated
  • If the plaintiff and the defendant are citizens of different states and the amount of money that is being sought is over $75,000
  • Any state or federal court where both parties agree to take part in the lawsuit

The plaintiff can choose to file a breach of contract lawsuit in another court that has jurisdiction over the matter if:

  • There is no forum selection clause in the contract
  • The clause for forum selection is unenforceable.

Defenses to Breach of Contract Allegations

Usually, in asserting a declaration for breach of a written contract, the plaintiff must prove the contents of the contract, the date that all involved parties signed it, the stipulations of the contract, actions portrayed by the plaintiff, and how the defendant breached the contract which is often due to lack of payment. The plaintiff should also attach a copy of the contract to the complaint about the purpose of documentation.

Often with contractual disagreements, the defendant will deny liability in response to the allegations made in the complaint and provide reasons as to why they aren't guilty of breach of contract, which is legally known as an affirmative defense. The affirmative defense usually includes grounds such as:

  • Lack of consideration or failure to provide consideration
  • Exceeded the statute of limitations, depending on the state in which the contract was created.
  • Lack of payment

Another defense that is a rule of evidence is called the "parole evidence rule." When the stipulations of a contract are being disputed in court proceedings, the parole evidence rule prevents the presentation of any agreements that were made between the parties that conflict with the contract and before the contract was created. So the parole evidence rule could influence the terms and conditions of a contract and the way it can be enforced.

The court of law will refer to the contract and its terms to get the full declaration of the involved parties' agreement and the date it was made. So when drafting a contract, it is vital to include all the terms and conditions of the agreement in the written document. It is essential to note that the parole evidence rule is not applicable to oral agreements between the involved parties because it can be proven to have changed the initial written contract if all legal requirements are there.

To obtain legal and financial relief from the party that has breached the contract, the plaintiff has the option of filing a lawsuit in different courts of law. The laws of one jurisdiction can provide the plaintiff with distinct advantages over another. Strategically choosing your jurisdiction can greatly sway the outcome of your case, so this decision requires serious consideration.

Choosing the jurisdiction and court venue are the most difficult and influential aspects of civil lawsuits and can be instrumental in determining the outcome of it. An experienced attorney can aid the plaintiff in making beneficial decisions that will help them win their cases. Post your legal need on UpCounsel's marketplace. UpCounsel has the most knowledgeable and experienced lawyers on their staff that can be of assistance with any legal need. UpCounsel accepts only the top five percent of lawyers, coming from law schools such as Harvard Law and Yale Law, having an average of 14 years of legal experience which includes working with or on behalf of companies like Menlo Ventures, Airbnb, and Google.