Breach of Contract

A breach of contract results when a brokerage firm fails to live up to written and/or verbal agreements regarding the handling of your account, which includes FINRA and SEC rules and laws. If your broker failed to fulfill promises made in your agreement, then your broker likely breached their contract with you. A New York investment breach of contract law firm like Malecki Law can review your contract and potential breaches at no cost. When you entered a professional relationship with your broker, you likely entered into a written agreement with them.

In general, contracts require the following elements: offer, acceptance, and consideration. The contract between you and your broker contains the terms of your relationship, such as the broker’s obligations owed to you as their client. Your broker may breach the contract by failing to perform subject to the contract terms. If it seems as though your broker did not perform her/his promises that were established at the outset of your relationship, your broker potentially breached their contract with you. A New York investment breach of contract attorney at Malecki Law can assess your potential case in a free consultation.

Damages

If your broker engaged in breach of contract, you might be entitled to some form of damages. There are three types of damages: compensatory damages, liquidated damages, and punitive damages. Compensatory damages are meant to compensate investors for the financial losses they sustained due to the broker’s breach of contract. Compensatory damages tend to be the most common type of damages. Liquidated damages may be awarded if there was a liquidation clause in the initial contract, which would contain a fixed amount of damages to be paid to the non-breaching party, the investor in this case. Lastly, punitive damages are the least common type of damages because they are intended to punish the broker’s intentional misconduct. If you notice your broker failed to fulfill promises made in your agreement, you need an experienced investment breach of contract lawyer in New York at Malecki Law who can review your contracts and advise you accordingly.

Next steps – Dispute Resolution

If you have a viable breach of contract claim, you can file for FINRA Arbitration. Arbitration is an alternative to going to court and tends to be faster and less expensive. The first step to the arbitration process is filing a statement of claim against your broker and/or brokerage firm (the respondent). The statement of claim outlines the dispute with the respondent, relevant legal arguments, and damages. The respondent must then timely file a statement of answer. Then, the parties engage in arbitrator selection, prehearing conferences, and discovery. If you notice your broker failed to perform the terms outlined in your agreement, your broker may have breached their contract. A New York investment breach of contract law firm like Malecki Law is skilled at these claims. The previously mentioned steps all lead up to the hearing. After the hearing, a panel of arbitrators will issue an arbitration award, which will include damages awarded among other things. If a claimant investor is awarded damages, the respondent has thirty days to make payment. At any point, you can request mediation. Mediation is an informal route to dispute resolution, which is typically faster and less expensive than litigation or arbitration. Through mediation, both parties have the common goal of reaching a settlement.

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