Breach of Contract

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Recovering Damages for Securities Breach of Contract for Clients Nationwide

When brokerage firms and financial investors want you to invest with them, they make many promises. But on many occasions, some or even a substantial number of these promises, turn out to be false. On such occasions, you may be able to hold them liable for securities breach of contract. Promises made by a financial advisor or brokerage firm to an investor are considered important. If they have made promises that your account will be handled in a certain manner, a contract can crystallize. This means that if your financial advisor made promises to you regarding how they will help you trade your stock but broke their promises, they may be liable to you.

The basis of this rule is that promises made at the time of entering an agreement may form obligations under the agreement. And if your financial advisor fails to live up to their promises, you may be able to seek damages against them. Determining if a breach of contract has occurred is not always straightforward. It will often require a thorough analysis of the unique facts and circumstances of your case. To do this properly, and make the best of your shot at compensation, you will need the services of a qualified securities attorney like Irwin Weltz. Attorney Weltz has extensive experience in securities law cases.

Get in touch with Weltz Law today by calling (877) 905-7671 to understand if you have a claim for securities breach of contract.

Formation of a Contract With a Financial Advisor

Brokerage firms and financial advisors are just like any other party you enter into a contract with. When somebody offers you their service and says they can provide you with a benefit, you reasonably expect that you will get what they have promised. And if you pay money in exchange for those promises, a contract comes into being.

In much the same way, a brokerage agreement between you and your broker or financial advisor amounts to a contract. When they promise to administer your account in a certain way, their promises may become contractual obligations that they are bound to deliver on. It does not matter that they only orally made those promises. Contracts may be oral or written. They may even be implied from the actions of the parties involved in the transaction. Based on these principles of contract, any promises, whether express or implied that were made between the parties, have binding quality. You can sue on them if the financial advisor breaches those promises.

Important Elements of a Securities Breach of Contract Claim

Securities breach of contract claims are used to hold brokerage firms and financial advisors to their promises. The position that they occupy in relation to investors is one where they must act with care. They must provide you with full and accurate information about your proposed investment. If they have made promises they cannot deliver on or if they fail to deliver on those promises, you have a right to remedy.

Recovering compensation will however depend on adducing proof that a breach of contract has occurred.

There are four important elements of proof to be aware of:

1. The existence of an enforceable agreement

This is usually the most difficult aspect of proof for securities breach of contract claims. Apart from the fact that you must show the agreement was enforceable, the case would also require proof of the specific terms of the contract. This would obviously be difficult in cases of an implied or oral contract and proof will depend on the specifics of your case.

2. Performance by the plaintiff

Your case will also require proof that you have performed your own part of the agreement. This is based on the principle that a party alleging breach of a contract must not be culpable for breach as well. You should approach the court with “clean hands”.

3. Breach of the agreement

If the broker or their firm has failed to live up to their promises under the contract, this would constitute a breach. But determining whether a breach has occurred or not will depend on the facts of the case. Weltz Law and its securities attorney will be able to help you find and adduce those facts that show the defendant’s breach.

4. Damage due to the breach

The final element you need to prove to be entitled to compensation is damage. You must have suffered damage arising from the breach for you to be entitled to compensation. Damage may be in the form of a lost opportunity to sell your stocks at profit. It could also arise from losing more money on your stock holdings than you would have if your broker was prudent. Proof of damage will also depend on the facts of your case.

What Damages Can You Recover for a Breach of Contract?

Depending upon successful proof of your claim, you may be able to recover direct and indirect damages for the breach of contract. Direct damages are linked directly to the breach by the defendant. They constitute compensation for the loss you have actually incurred due to the breach.

For instance, if your broker failed to monitor your account as per your agreement and this caused you to lose $10,000 on your shares, this will be your direct damages. The rule in computing this category of damages is that you would be entitled to the value of your stocks “as of the date of the breach”.

Indirect damage may also be assessed against the defendant. This category of damages will cover any consequential losses caused to you by the breach of the contract. It can include out of pocket expenses incurred due to the breach. Although, the rule is that the damage resulting in those losses must have been reasonably foreseeable.

How Can a Breach of Contract Attorney Help?

A breach of contract attorney can provide much-needed support and professional guidance when it comes to securities breach of contract. They bring a wealth of experience in dealing with such cases, ensuring that your rights are protected and that you get fair compensation for any breach. They are well-versed in the complexities and nuances of securities law and can help you navigate through the legal process with confidence.

Services provided by a breach of contract attorney to investors in securities can include:

  • Evaluation of the Case: They start by thoroughly assessing your case, reviewing all documents, and understanding the nature of the breach.
  • Legal Advice: They provide valuable legal counsel, helping you understand your rights and the best course of legal action.
  • Representation: They represent you in all legal proceedings, advocating for your rights and interests.
  • Negotiation: They negotiate with the other party, aiming to reach a fair settlement that compensates you adequately for the breach.
  • Preparation for Trial: If the case goes to court, they prepare a robust case, gathering evidence, calling witnesses, and forcefully presenting your case.
  • Pursuing Compensation: They aggressively pursue the maximum compensation available to you under the law.
  • Post-Trial Services: After the trial, they help you with any necessary paperwork and guide you on the next steps, including the collection of the award.

Remember, in the world of securities, the stakes can be high. Engaging a competent attorney is your best assurance of protecting your interests.

Contact a Seasoned Securities Arbitration and Litigation Attorney

Investors often face substantial losses due to a breach of contract by the broker or brokerage firm. If you suffered financial harm due to a breach of contract, it is vital to confer with a securities attorney regarding whether you may be able to recover compensation. New York based attorney Irwin Weltz at Weltz Law has represented parties in securities litigation and arbitration hearings for more than two decades.

If you’re ready to speak to a member of our legal team, then please give us a call today at (877) 905-7671 to set up a free case consultation.


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