Every time i try to upgrade to the latest version I get an error that it failed to extract the file.
1Password Version: 3.8.20Extension Version: Not ProvidedOS Version: el capitanSync Type: dropbox
@Esweeney as your post relates to 1P3 for Mac I have moved the post from the 1Password for Mac forum to the 1P3 legacy forum where you will get more help. Although no doubt someone will be able to help with your specific problem, as you're running OS X El Capitan you'll also want to look at this sticky at the top of the forum.
The answer to your specific query would be to move the current copy of the 1Password application from your /Application/ folder to the Trash (don't worry, it doesn't affect your vault) and then download a fresh copy from the Legacy section of our AgileBits Download page. Stephen_C's point though is an important one as even running the last version of 1Password 3 for Mac won't help if you're now running El Capitan. We talk about this in the link he's provided and sadly the only viable option is to strongly consider the move from 1Password 3 to 1Password 5. If you have any questions please do ask.