Cause of action: Overview, definition and example
What is a cause of action?
A cause of action is the legal reason someone can file a lawsuit. It’s essentially the foundation of a legal claim, explaining what happened, why it violated a law or agreement, and how the plaintiff (the person suing) was harmed. Without a valid cause of action, a lawsuit can’t proceed.
For example, if a contract is breached, the cause of action might be that the defendant failed to fulfill their responsibilities under the agreement.
Why is a cause of action important?
A cause of action is important because it outlines the legal basis for holding someone accountable in court. It ensures that lawsuits are grounded in actual legal rights or wrongs, preventing frivolous claims. For the plaintiff, it provides a clear framework for presenting their case. For the defendant, it sets the stage for understanding and responding to the allegations.
In business, identifying a valid cause of action can help parties resolve disputes more effectively, whether through negotiation, arbitration, or litigation.
Understanding a cause of action through an example
Imagine a vendor fails to deliver goods by the agreed deadline in a contract. The buyer suffers financial losses as a result. The buyer’s cause of action would be breach of contract, as they can claim that the vendor didn’t fulfill their agreed responsibilities.
In another case, a customer is injured due to a defect in a product. Their cause of action could be product liability, arguing that the manufacturer’s negligence led to the defect and, ultimately, the injury.
An example of a cause of action clause
Here’s how a cause of action clause might look in a contract:
“This Agreement does not waive any party’s right to pursue a cause of action arising from the breach of any term or obligation contained herein.”
Conclusion
A cause of action is the legal basis for filing a lawsuit, explaining what happened, why it’s a violation, and how the plaintiff was harmed. It ensures legal claims are valid and provides a clear structure for resolving disputes.
By understanding the concept of a cause of action, businesses can better navigate potential disputes, assess their legal rights, and protect themselves against unfounded claims. It’s a critical building block in the legal system and business agreements.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.