Key Takeaways:

  • Verbal contracts are legally binding in Nevada, but proving their existence and terms can be challenging.
  • Certain contracts must be in writing under Nevada's Statute of Frauds, including real estate agreements, contracts exceeding one year, and agreements for goods over $500.
  • Elements of a breach of contract include the existence of a valid contract, failure to fulfill obligations, and resulting damages.
  • Types of damages for breach of contract can include compensatory, consequential, and specific performance remedies.
  • Oral contracts are enforceable but require strong evidence such as witness testimony, email exchanges, or actions taken by both parties.

A breach of contract in Nevada occurs when one party does not meet the terms of the contract, and the plaintiff can prove the type and extent of losses they suffered because of the breach. Parties cannot claim breach of contract in Nevada without having a valid and enforceable contract in place.

Elements of a Contract

A verbal contract can be legally binding, but to avoid any confusion, a written contract is best. A valid and enforceable contract will clearly define all details of the agreement, including:

  • Clear identification of all parties involved in the contract.
  • The obligations and rights of each party included in the contract.
  • The services or products offered by one party to the other party.
  • Evidence that the other party agreed to the offer.
  • Any considerations that each party gave or obtained through the contract.
  • The terms and conditions of any payments by the parties involved.
  • The terms for ending the contract.
  • The terms for resolving any disputes in the contract.

Are Verbal Contracts Binding in Nevada?

Yes, verbal contracts are binding in Nevada under most circumstances. However, proving an oral contract exists can be challenging without supporting evidence. Under Nevada law, for a contract—whether written or verbal—to be enforceable, it must include:

  • An offer and acceptance
  • Consideration (a mutual exchange of value)
  • An agreement on essential terms
  • The legal capacity of both parties to contract

Despite their enforceability, certain contracts must be in writing under Nevada's Statute of Frauds (NRS 111.220), including:

  • Agreements for the sale of real estate
  • Contracts that cannot be performed within one year
  • Promises to pay another person’s debt
  • Sales of goods over $500 (governed by the Uniform Commercial Code (UCC))

Without a written agreement, proving the existence of an oral contract typically requires witness testimony, emails, text messages, or other corroborating evidence.

Breach of Contract Elements

For someone to claim breach of contract in Nevada, the following elements must occur:

  • A valid contract must exist between the plaintiff and the defendant.
  • The defendant didn't pay the other party for their services or the defendant only partially performed the services agreed to in the contract.
  • The defendant's failure to provide products or services led to a material breach of the contract. A material breach occurs when the breach is significant enough to destroy the integrity of the contract.
  • The defendant didn't offer sufficient reason for failing to pay for services or not completing the services they were contracted to perform.
  • The plaintiff was in compliance with their contract terms prior to the defendant's failure to provide services or products or the plaintiff provided sufficient reason to excuse not meeting the terms.
  • The plaintiff suffered damage because of the breach.
  • The plaintiff's damages were a foreseeable result of a particular breach.

Common Defenses Against a Breach of Contract Claim

When accused of breaching a contract in Nevada, a defendant may use various legal defenses, including:

  • Lack of a valid contract – If a crucial element (offer, acceptance, consideration) is missing, the contract may not be enforceable.
  • Statute of Frauds – If the contract falls under the category requiring a written agreement, the defendant may argue that an oral contract is unenforceable.
  • Mutual mistake – If both parties were mistaken about a key contract term, the contract may be voided.
  • Fraud or misrepresentation – If one party was deceived into entering the contract, they may not be bound by it.
  • Duress or undue influence – A contract signed under pressure or coercion may not be legally enforceable.
  • Impossibility of performance – If unforeseen events make performance impossible (e.g., a supplier’s sudden bankruptcy), the contract may be voided.
  • Unconscionability – If the contract is so one-sided that enforcing it would be unjust, the court may refuse to uphold it.

Each of these defenses can impact a breach of contract claim, emphasizing the importance of documenting agreements whenever possible.

Damages of Breach of Contract

Breach of contract law in Nevada allows one party to file a lawsuit against the other party to obtain damages for the breach. To pursue the claim, the party must be able to prove that the breach occurred.

If the parties involved can't settle the breach on their own without legal action, it is recommended that the complainant hire an attorney. In cases where the court awards damages to the plaintiff, they are enforcing what is appropriate under the contract.

In many breach of contract cases, the plaintiff sues for monetary damages as compensation. Monetary damages are also known as compensatory damages because they compensate the plaintiff for the actual financial losses they suffered. Types of compensatory damages include:

  • Expectation damages, which is the amount of money or value of the goods the plaintiff expected to receive if the defendant had satisfied the contract conditions. The plaintiff can refer to the contract terms or the market value of the promised products or services to decide this amount. For example, if an electrician installs a wiring system in a house and the homeowner agrees to pay $2,000, the electrician's expectation damages, if the homeowner doesn't pay, would be $2,000.
  • Consequential damages, which is the amount of damages the plaintiff suffered indirectly because of the breach. Because it is difficult to figure out how much money the plaintiff could have gained without the breach, this amount is often speculation. For example, a limousine rental company contracts a mechanic to repair one of their vehicles and the mechanic doesn't complete the repairs. The consequential damages equal the amount of rental fees the company would have received for renting the limo. In cases where the plaintiff is seeking consequential damages, they must prove that the loss of income was foreseeable and was a direct result of the breach.

In some breach of contract cases, the plaintiff pursues other types of damages. For example, if the owner of a property decides not to sell and there is a contract for the sale in place, the buyer could ask for damages that forces the defendant to sell the property as agreed in the contract.

Statutory and Equitable Remedies for Breach of Contract in Nevada

In addition to monetary damages, Nevada law provides for statutory and equitable remedies in breach of contract cases:

  • Specific Performance – When monetary damages are insufficient (e.g., real estate contracts), the court may order the breaching party to fulfill their contractual obligations.
  • Rescission and Restitution – The contract may be canceled, with both parties returning any exchanged benefits.
  • Liquidated Damages – If the contract specifies damages for a breach, courts may enforce these terms unless they are deemed unreasonable.
  • Injunctive Relief – Courts may issue an order preventing a party from taking specific actions that would violate the contract.

Nevada courts assess the type and extent of losses suffered to determine the most appropriate remedy.

FAQs

1. Are verbal contracts binding in Nevada?

Yes, verbal contracts are legally binding in Nevada unless they fall under the Statute of Frauds, which requires specific agreements to be in writing.

2. How can I prove an oral contract in Nevada?

Evidence such as emails, text messages, witness testimony, past dealings, and recorded conversations can help establish the existence and terms of an oral contract.

3. What contracts must be in writing under Nevada law?

Nevada’s Statute of Frauds (NRS 111.220) requires written contracts for real estate transactions, agreements lasting over a year, and sales of goods over $500, among others.

4. What damages can I recover for a breach of contract in Nevada?

Damages may include compensatory damages (financial losses), consequential damages (indirect losses), liquidated damages (pre-agreed amounts), and equitable remedies like specific performance.

5. Can I cancel a contract if I was misled?

Yes, if a contract was entered into due to fraud, misrepresentation, or coercion, a party may seek to have it voided or rescinded in court.

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