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Q: Employment law, Breach of Contract, Reliance, Punitive Damages ( Answered 4 out of 5 stars,   5 Comments )
Subject: Employment law, Breach of Contract, Reliance, Punitive Damages
Category: Reference, Education and News > Education
Asked by: nancy1-ga
List Price: $25.00
Posted: 24 Jul 2005 23:45 PDT
Expires: 23 Aug 2005 23:45 PDT
Question ID: 547497
can you please find case law for similar cases that involve this same
situation. It falls under BREACH OF CONTRACT AND RELIANCE

    there are these two people, one is licensed under a mother company
to conduct real estate mortgages and the other was just basically a
marketer or loan finder for him. And everytime they closed a loan
together,that the loan finder would find, they would split the profits
50/50. the two worked for about a year and a half and everything was
fine. they completed over 13 transactions together. Then the last
three or four transactions that were completed, the loan finder did
not get paid.The other person claims he doesnt have the money, he
spent it on other things and will pay the loan finder when he can. the
loan finder wants to sue the other person for breach of contract and
reliance (reliance meaning that the person sueing relied on the money
for other obligations). the three loans combined totaled about 10
grand. I am not asking for legal advice. But if you can find me case
law that is similar to this situation i would appreciate it. Please if
possible find me previous cases in the state of California where a
similar action ocurred. Understand though that the loan finder was not
W2 or employeed for the person that was licensed to complete the
loans. They were contracted together an oral contract.

Request for Question Clarification by hagan-ga on 26 Jul 2005 08:21 PDT
Hi Nancy1.  You've brought up an interesting fact pattern -- and it's
a fact pattern that does NOT appear in the database of reported
California cases.  So as far as finding case law for similar cases,
that's been difficult.

But in your later comment, you indicate that what you're really
looking for is the measure of damages in a contract case -- and that's
something that I CAN answer, with lots of California case law.  Would
that suffice as an answer to your question?

Clarification of Question by nancy1-ga on 29 Jul 2005 19:37 PDT
yes i guess i would like to know the outcome of breach of contract
cases and their scenarios. It doesnt have to, necessarrily, do with
these types of transactions but please try to get as close as possible
to the fact pattern i gave. Show me anything and everything that has
to do with someone not paying another person for work they have done.
And if you can show me why a particular decision was made and the
legal reasons behind everything that would help also.

Clarification of Question by nancy1-ga on 29 Jul 2005 19:39 PDT
also please please please look up reliance for me and case that also
involve reliance.
Subject: Re: Employment law, Breach of Contract, Reliance, Punitive Damages
Answered By: hagan-ga on 01 Aug 2005 11:06 PDT
Rated:4 out of 5 stars
Hi Nancy1.  First, let me point out that "breach of contract" and
"reliance" are two separate issues in the law.  "Breach of contract"
is a recognized claim in California.  It has four elements that must
be proven:

(1) the existence and terms of the contract itself; 
(2) plaintiff's performance of the contract or excuse for nonperformance; 
(3) defendants' breach; and 
(4) the resulting damage to the plaintiff.

(See, for example, _Reichert v. General Ins. Co._ (1968) 68 Cal.2d
822, 830; see also California Book of Approved Jury Instructions
(BAJI) 10.85 --

"Reliance," on the other hand, is NOT a recognized claim in and of
itself.  Instead, it is a PART of a claim for fraud/misrepresentation.
 In order to bring an action against somebody for fraud, you have to

"1. The defendant must have made a representation as to a past or
existing material fact;
2. The representation must have been false;
3. The defendant must have known that the representation was false
when made [or must have made the representation recklessly without
knowing whether it was true or false];
4. The defendant must have made the representation with an intent to
defraud the plaintiff, that is, [he] [she] must have made the
representation for the purpose of inducing the plaintiff to rely upon
it and to act or to refrain from acting in reliance thereon;
5. The plaintiff must have been unaware of the falsity of the
representation; must have acted in reliance upon the truth of the
representation and must have been justified in relying upon the
6. And, finally, as a result of the reliance upon the truth of the
representation, the plaintiff must have sustained damage."
California BAJI 12.31

So you can see from #4, 5, and 6, that "reliance" is part of a case for fraud.

Let's discuss breach of contract first.  Assuming that you can prove
an enforceable oral agreement (yes, oral agreements ARE usually valid
with certain exceptions); assuming that you can prove that you
performed your part of the deal; and assuming that you can prove the
defendant's breach (which should be the easy part -- you simply state
under oath that you haven't been paid); then the question becomes,
what are your damages?  And this is also simple.

Where the contract requires the defendant only to pay money (as
opposed to perform some other task), then the measure of damages is
the amount due under the terms of the contract, plus 10% interest on
that sum (assuming it was a sum certain) from the date of the breach. 
(See BAJI 10.93,
; California Civil Code Section 3302.)

Punitive damages, damages for emotional distress, and the like, are
NOT available in contract cases.  (See California Civil Code Section
3294; California Civil Code Section 3302.) For purposes of a
breach-of-contract case, it does not matter that you were relying on
the money, or that you incurred other obligations, or any other
extraneous issue.  You are only entitled to receive what the contract
calls for -- even though the breach may have seriously harmed your
financial position and caused you additional damage.

However -- punitive damages and damages for emotional distress ARE
available in FRAUD cases.  Here is where your "reliance" issue arises
-- IF you can demonstrate that the defendant never had any intention
of paying you for these transactions.  If you can prove that the
defendant deliberately lied to you in order to induce you to continue
providing these leads, then you get to the issue of whether you
"relied" on the promise of incoming money.

The measure of damages for fraud is much broader than the damages
available for breach of contract.  Instead of being limited to the
amount due under the contract, in a fraud case the defendant would be
liable for "all the detriment proximately caused" by the fraud,
"whether it could have been anticipated or
not." (Civil Code Section 3333,

Civil Code Section 1709 provides that "[o]ne who willfully deceives
another with intent to induce him to alter his position to his injury
or risk, is liable for any damage which he thereby suffers."

Note the difference between these statutes and the measure of damages
for contract cases.  In a contract case, the defendant is only liable
for the amount due under the contract, plus interest -- no matter how
badly you needed the money.  In a fraud case, the defendant is on the
hook for WHATEVER harm is caused to you, including damage to your
credit, late fees on other obligations, and so on.  But to get to
that, you have to be able to prove that he lied to you.

I hope this has been helpful.  If I can provide any further
assistance, please don't hesitate to ask for clarification.
nancy1-ga rated this answer:4 out of 5 stars and gave an additional tip of: $5.00
it was good, i would have given you five but with an infinite amount
of information, things can always be better, you were good though i
was satisfied. thank you

Subject: Re: Employment law, Breach of Contract, Reliance, Punitive Damages
From: 4keith-ga on 25 Jul 2005 10:36 PDT
It would be to your advantage to at least talk to a paralegal or
attorney about this--it's very difficult for outsiders to know how to
find and where to look for case law.

4KEITH (I'm NOT a GOOGLE Researcher)
Subject: Re: Employment law, Breach of Contract, Reliance, Punitive Damages
From: vballguy-ga on 25 Jul 2005 11:34 PDT
1- It just has to be said on each post even though you already know
it, get the lawyer. (I am not a lawyer this is not legal advice)

2- Question - "How much can I sue for on an unpaid debt?"
Answer ".......You cannot sue for punitive damages in most cases,
unless there is actual fraud or intentional misconduct. ......."
Another overview of punative damages:
"Punitive damages are available in actions not arising from contract
where the plaintiff can show by clear and convincing evidence that the
defendant acted with "fraud, oppression, or malice."

3- Your single largest problem is that you wrote nothing down.  You
could improve your standing if you could show prove that there was an
oral agreement that the other party owed you.

A) Get them to sign an IOU for the full amount - Offer them more time
if they just sign an IOU

B) Get them on a payment plan-even if it is just $100 to start

C) Get some sort of record of the meeting of the minds in terms of what they owe.
Subject: Re: Employment law, Breach of Contract, Reliance, Punitive Damages
From: vballguy-ga on 25 Jul 2005 11:35 PDT
Sorry for the doube entry
the last point was to use something like email to get them to admit
they plan to pay you.
Subject: Re: Employment law, Breach of Contract, Reliance, Punitive Damages
From: nancy1-ga on 26 Jul 2005 05:44 PDT
Thank you for all your comments,  assuming that proof is not the
issue, the concern is, whether this is worth the time, what i want to
know is what can you collect monetarily from a breach of contract
Subject: Re: Employment law, Breach of Contract, Reliance, Punitive Damages
From: hagan-ga on 04 Aug 2005 10:17 PDT
Nancy1, thank you for the good rating and generous tip.  I appreciate it!

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