Are Breach of Contract Cases Eligible for Settlement Loans?
Breach of contract cases are common, but are you eligible for a settlement loan in these circumstances? Click here to learn all that you need to know.
Back in 2005, breach of contract cases accounted for one in three civil trials in US state courts. The median awards were $25,000 for judge-issued awards, while it was $74,000 for jury-issued awards.
This 2020, breaches of contracts are still common, especially with the health crisis. At least 23,835 contract cases got filed from January to November 2020 alone.
If you’re about to file a contractual breach lawsuit, you may be wondering if you can get a settlement loan.
Yes, you can, so long as you and your case satisfy lawsuit loan requirements.
To that end, we created this guide on settlement loans for breach of contract cases. Read on to learn more about contract cases and their eligibility for legal funding.
What Does a “Breach of Contract” Mean?
Parties who enter into an agreement put the terms of the agreement into a contract. The contract, in turn, details all the obligations that all involved parties must meet. If a party fails to satisfy even just one obligation, then that’s a “breach of contract.”
A contractual breach can occur if parties fail to perform their obligation on time. It can also take place if any of the involved entities don’t carry out their dues at all. They also “breached” the contract if they do something against the agreement’s terms.
Let’s say that you hire a building contractor for the construction of your home. You and the contractor agreed on specific materials and a strict completion date. You then had all these terms put into an official written document, which you and the builder signed.
However, the contractor still used different materials or failed to meet the deadline. Worse, the builder didn’t even inform you beforehand to obtain your permission.
In either case, the business you contracted with breached the contract. In this case, you can file a contractual breach lawsuit against the contractor.
Do note that some cases of medical malpractice can also be a form of a breach of contracts. The same goes for certain instances of wrongful termination.
When Is a Breach of Contract Case Eligible for a Settlement Loan?
Settlement loans are available for any filed, on-going breach of contract lawsuits. However, you must also have an attorney representing your contractual breach case. You and your lawyer should also have agreed on a contingency fee payment basis.
Why Is an Attorney Important?
If you haven’t retained a lawyer yet, it’s best that you do to raise your odds of winning your lawsuit. Many studies have proven that self-represented litigants often lose their cases. Self-representation puts you at a disadvantage, especially if the defendant has a lawyer.
An example is a housing eviction case, which can also have a breach of contract component to it. Studies found that lawyer-represented tenants had over six times more favorable outcomes. That’s in comparison to tenants who represented themselves.
It’s also for this reason that legal funding companies require attorney representation. After all, loans for settlement awards are non-recourse, which means you don’t pay them back if you don’t win. Lenders assume all associated risks whenever they issue a loan on a lawsuit.
As such, not having a lawyer means you’re at a high risk of not being able to pay back the lawsuit loan. Since loans for lawsuits are “no-win-no-pay,” legal funding lenders can lose a lot of money.
That’s why litigation funding companies need assurance in the form of an attorney.
Besides, many attorneys who take on breach of contract cases work on a contingency fee basis. So, you won’t have to pay their legal fees unless they win your case.
Why Apply for a Breach of Contract Settlement Loan?
Settlement loans let you tap your expected award even before the case concludes. After you and your attorney execute the funding contract, you can have the loan funds within the same day. Do note that the entire process, from the time you apply to the issue of the funds, can take about 48 to 72 hours.
Still, that’s only a few days compared to the months or years that settlements can take. Moreover, many US courts have had major backlogs due to the nationwide lockdown. Hearings got canceled, so you can also expect even more delays on an expected settlement.
Another reason is that you don’t have to worry about paying back a settlement loan if you don’t win. However, traditional loans require repayment, no matter what your situation is.
Since you only have to pay back the loan on your settlement if you win, you don’t have to make monthly payments. The loan costs will also get deducted from your settlement, so there are no out-of-pocket costs. By contrast, conventional financing comes with monthly repayments.
What Does the Lawsuit Loan Application Involve?
If you meet the eligibility requirements, you only have to fill out a short application form. Keep your lines open after submission, as the lender will get in touch with you soon. You just have to tell them more about your case so that they can also gauge how much to lend you.
After this, the litigation funding company’s underwriting team will evaluate your case. For this, they would need to call your attorney to request copies of your case documents. The evaluation process usually takes about 48 hours.
If approved, you will then receive a funding contract from the lender. You and your attorney must sign this and send it back to the litigation financing company. From here, you can expect your settlement loan funds within the same day.
Focus on Winning With the Aid of a Lawsuit Loan
There you have it, your ultimate guide to getting a settlement loan for a breach of contract case. Now that you know these cases are eligible for lawsuit loans, it’s time to think about applying for one. It’s also a smart idea to speak to your attorney so that your lawyer can give you more guidance.
Have you and your attorney agreed to a settlement loan application? If so, please know that Legal-Bay can provide all your litigation funding needs. Get in touch with us now to learn more about our low-cost settlement offers.