Breach of Contract

Our Charleston business lawyers have experience in handling a broad range of breach of contract claims and lawsuits.  Contract disputes are some of the most common disputes between both individuals and businesses.  Whether negotiating settlements or litigating issues, our lawyers bring thoughtful and practical experience to achieve desired results..

Common Breach of Contract Matters

Generally, a party must perform pursuant to the specific terms and conditions as set forth in a business agreement.  In other words, the provisions as set out within the four corners of the agreement will ultimately control.  Thus, it is very important that with any business agreement, the terms and conditions are thoughtfully considered and negotiated prior to its execution to avoid interpretation issues.  Any deviation from the specific terms of the business agreement often results in a breach of contract.  The breaching party is often liable for damages incurred by the non-breaching party or other remedies as set forth in the agreement.

There are a number of situations may give rise to a breach of contract claim.  For example, a party may do something that violates a term of the business agreement; a party may refuse to perform its obligations under the contract (such as delivering product or making payment); or a party may act (or fail to act) such that it makes it impossible for the other party to perform under the terms of the contract.

In general, to prevail on a breach of contract claim the following criteria must be shown:

• The existence of a valid business contract (there must be an offer, acceptance and consideration exchanged by the parties);
• A party breached the contract or failed to render performance when it became due;
• A party’s breach or failure of performance was not excused; and
• A part was damaged by the breach.

The fundamental issue in a breach of contract case is the intent of the parties.  The intent of the parties sets out the parties’ expectations to the business agreement, the extent of the parties’ duties and obligations, how the parties have allocated the risks of the transaction, and what the consequences of the breach of contract will be.  The intent of the parties will be reflected within the four corners of the business agreement.  Intent can affect what each party views to be the consequences of contractual breach and it can affect how a court may interpret the provision of the business contract.  Thus, it’s crucially important to always have a well written business agreement in place that properly reflects the business transaction and the parties’ duties and responsibilities post execution.

Breach of Contract Remedies

An injured party generally has a right to certain damages due to the other party’s breach of the contract.  The law may provide the following contract remedies to a party damaged by a breach of contract:

• Expectation damages awards a party the difference between the value of the benefit expected as a result of the other party’s promised peformance and the value actual received (aka benefit of the bargain);
• Restitutionary damages restores the damaged party to its position before the breach of contract occurred.  In other words, this award makes the damaged party whole again.
• Market value damages awards the injured party the market value of the performance promised by the other party.  In other words, the injured party receives the benefit of the bargain even though the breaching party failed to perform.
• Cost expectancy allows an injured party to recover the damages it will incur to obtain substitute performance by another party.
• General damages allows an injured party to recover the value of the performance contracted for;
• Special damages allows an injured party to recover the out of pocket costs or losses the breach caused.
• Reliance damages reimburses an injured party for any costs incurred in preparing to perform or performing the contract.