Breach of Contract vs. Unfair Business Practices: When Is a Dispute Grounds for Civil Court?
Nov. 2, 2026
A dispute belongs in civil court when you can show a legal duty, a breach of it, and a loss that followed. Breach of contract and unfair business practices are two different ways of meeting that test. One starts with an agreement, written or spoken. The other starts with conduct Michigan law prohibits, whether or not a contract exists.
Most contract disputes that come through my Farmington Hills office involve a vendor, a customer, a tenant, or a partner who stopped holding up their end. Small business owners usually want to know whether they have a case and whether filing a civil lawsuit is worth it. Both answers depend on which kind of claim you have.
Key Takeaways
A breach of contract claim requires a valid agreement, your own performance, the other side's failure to perform, and a loss that followed. Only a party to the agreement can bring it.
An unfair business practice claim is about conduct, not contract terms. Under Michigan's Consumer Protection Act, a misled buyer can recover actual damages or $250, whichever is greater, plus reasonable attorney fees.
Michigan gives you six years to file a breach of contract claim and generally six years for a consumer protection claim. Negligence claims get three. Miss the deadline and the claim is gone.
Where you file depends on the amount in dispute, and for Farmington Hills businesses the larger cases go to the Oakland County Circuit Court. An Attorney General complaint or mediation often settles the matter before a lawsuit is needed.
What Counts as a Breach of Contract in Michigan
A breach of contract happens when one party fails to do what a legally binding contract required. The agreement can be written, verbal, or implied by how the parties acted. To win, you must prove four things: a valid agreement existed, you performed your side, the other party did not perform theirs, and you lost money because of it.
Some breaches are obvious. A contractor takes a $12,000 deposit and never shows up. A buyer walks away from a real estate contract the week before closing. Others are quieter: late payments that pile up, or finished work that falls short of what the contract described.
Commercial leases produce a steady share of these cases, and so do the supplier agreements business owners sign without a second read. Purchase agreements for homes and commercial property follow the same four-part structure.
What Counts as an Unfair Business Practice
An unfair business practice is conduct the law prohibits no matter what any contract says. Michigan's main source is the Consumer Protection Act, which the Michigan Attorney General says covers goods and services bought for personal, family, or household use. Under the FTC deception policy, a practice is deceptive when it is likely to mislead a reasonable consumer about something that matters to the purchase.
Advertising one price and charging another. Hiding a defect the seller knew about. Claiming a product was made somewhere it wasn't. Burying unfair terms in fine print the customer had no real chance to read. The contract itself may be valid. The problem is how the business behaved around it.
A company that was formed properly as an LLC or corporation can still face one of these claims if its sales practices cross the line. Starting a small business lawfully includes how you sell, not only how you register.
Three Differences That Decide Where Your Claim Goes
Three differences decide where a claim goes.
Who can bring the claim. Only a party to the contract, or someone it was written to benefit, can sue for breach. A consumer protection claim belongs to the person who was misled. The Attorney General can also bring one on behalf of the public.
What you have to prove. Breach of contract is about the terms. An unfair practice claim is about conduct, and intent to deceive is often not required. A broken promise can also be a negligence claim when the other side owed you a duty of care, which puts it closer to the questions in my personal injury FAQ.
Which court hears it. Smaller claims go to district court, larger ones to circuit court, and the smallest to the small claims division without a lawyer, as the Michigan Supreme Court Learning Center explains. For Farmington Hills businesses, the larger cases are heard at the Oakland County Circuit Court in Pontiac.
Michigan Deadlines and What You Can Recover
Michigan gives you six years to file a breach of contract claim under MCL 600.5807, counted in most cases from the date of the breach. Consumer protection claims carry their own limit under MCL 445.911: six years from the practice, or one year after the last payment in the transaction, whichever ends later. Negligence claims for injury to a person or property get three years under MCL 600.5805.
Miss the deadline and the claim is gone, however strong the facts.
What you can recover differs too. A contract case aims to put you where the deal would have left you: the unpaid invoice, the replacement cost, the documented lost profit. Under MCL 445.911, a person who suffers a loss from an unfair practice may recover actual damages or $250, whichever is greater, plus reasonable attorney fees. That fee provision changes the math on a smaller dispute.
When Civil Court Is the Right Step
Civil court makes sense when the loss justifies the cost, the other side has something to collect from, and the paper trail supports your account. It makes less sense when the amount is small, the facts rest on a handshake, or the relationship is worth more than the money.
Two other routes come first in many cases. The Attorney General's complaint process sends a letter to the business and tries to mediate, though the office cannot act as your private attorney. Michigan's Community Dispute Resolution Program reports that breach of contract is among the most common disputes its centers settle, and the Oakland Mediation Center in Bloomfield Hills serves this county. Those ways to resolve a civil dispute without trial are worth trying.
But some defendants only respond to a filed complaint. Waiting then costs you leverage, and eventually the claim.
Working With a Civil Litigation Attorney in Farmington Hills
I'm Blake P. Lipman, and I have practiced law in Michigan since 1995, including about five years as a real estate lawyer for title companies. I earned my J.D. from Wayne State University's law school in 1994 and my B.S. from its business school in 1991.
As a civil litigation attorney in Farmington Hills, I review the agreement, the correspondence, and the deadline before telling a client whether to file. I serve Oakland, Wayne, Macomb, Livingston, Washtenaw, and Monroe counties, and my practice areas also cover family law and estate planning. Call (248) 985-7135 or contact my office to talk through your dispute.