When should you sue for breach of contract?
If a vendor, customer, or another business has failed to provide the agreed-upon services, goods, or payment, you may have the option of filing a lawsuit for breach of contract – but should you?
Below, we will discuss:
- How to avoid litigation over breach of contract,
- The elements of a breach of contract claim in SC,
- The elements of a breach of contract accompanied by a fraudulent act,
- Defenses to breach of contract claims, and
- The available remedies for a successful breach of contract lawsuit.
Breach of Contract: Avoiding Litigation Whenever Possible
A reputable business law attorney can help you to avoid lawsuits over contract breaches by 1) negotiating and drafting your business contracts and 2) reviewing your existing contracts.
By using your business lawyer before disputes arise, you can save money by avoiding expensive litigation altogether or, if litigation is unavoidable, by ensuring that you have clear terms and provisions in your contracts so they are more easily enforced.
Negotiating and Drafting Effective Contracts for Your Business
Just as good fences make good neighbors, good contracts make good business partners…
In many cases, the need for litigation can be avoided when your business law attorney helps you to negotiate and draft your contracts to include:
- Clear statements of each party’s rights and responsibilities,
- Liquidated damages in the event of a breach,
- Clear notice provisions when appropriate,
- Arbitration clauses to settle disputes out of court,
- Special warranties,
- Termination rights,
- Force Majeure clauses,
- Confidentiality clauses, and
- Limitations of liability.
When the terms of your agreement, the definition of a breach, and the potential remedies are clear, there should be no misunderstandings, and the parties are less likely to breach the contract…
If your business has been operating for some time already, you can also reduce the possibility of litigation over breaches of contracts by having your business law attorney review your company’s existing contracts to:
- Identify problem contracts that need to be renegotiated,
- Identify key notice requirements, warranties, termination rights, force majeure clauses, or other terms that could affect your rights,
- Identify contract provisions that may be changed by new or revised government rules and regulations,
- Identify key provisions that protect you and your business that are missing from your contracts, and
- Identify whether you or another party has breached any contract terms and advise you as to how to proceed to resolve any potential issues.
But what happens when a business partner, individual, or company fails to meet their contractual obligations despite your best efforts?
Breach of Contract Law in SC
If a business or individual has breached their contract with your company, your first step is to contact your Myrtle Beach business law attorney – your attorney may be able to:
- Avoid litigation by negotiating a resolution with the other party,
- Review your situation to ensure that you are not missing important elements of a breach of contract like providing the other party an opportunity to cure their breach, or
- File a lawsuit for breach of contract to recover the goods or money that are owed to you.
The Elements of Breach of Contract in SC
To prove a breach of contract in SC, you will need to show that:
- A contract was formed – a well-drafted, written agreement is the best evidence, but a legally binding contract can be formed in most cases when there is 1) an offer, 2) acceptance of the offer, and 3) consideration (some form of payment or benefit),
- You did what you were supposed to under the terms of the contract, or your performance is excused by the other party’s material breach,
- The other party did not do what they were supposed to under the terms of the contract, even after providing them an opportunity to “cure” their breach, and
- You suffered damages as a result of the other party’s breach.
You must prove 1) the existence of a contract, 2) the breach, and 3) the damages caused by the breach.
Breach of Contract Accompanied by a Fraudulent Act
In most cases, you cannot recover punitive damages in a breach of contract action. You may be entitled to punitive damages, however, if you can prove that the breach of contract was motivated by fraud.
SC’s appellate courts have defined breach of contract accompanied by a fraudulent act as:
- A breach of contract,
- A fraudulent intention on the part of the breaching party, and
- A fraudulent act that accompanies the breach.
What is a “fraudulent act?”
In Perry v. Green, the SC Court of Appeals held that a “fraudulent act” for purposes of breach of contract accompanied by a fraudulent act can be “any act characterized by dishonesty in fact, unfair dealing, or the unlawful appropriation of another’s property by design.”
Defenses to Breach of Contract Claims
There are many possible defenses to breach of contract claims in SC. Depending on the facts of your case, the defenses may include:
- There was no contract to breach,
- There was no breach of the contract,
- The statute of limitations has run for a breach of contract claim,
- The Statute of frauds – some contracts must be in writing,
- A condition precedent has not been met,
- Accord and satisfaction – when you have already accepted partial payment in a settlement,
- Mistake as to the terms of the contract,
- Ambiguity or indefinite terms in the contract,
- Violation of public policy – if the contract’s terms are illegal or in violation of public policy, the contract cannot be enforced,
- Repudiation by the plaintiff before the defendant’s breach – where the plaintiff expressed that they were going to breach the contract themselves, the other party may be excused from performance,
- Ratification – where the plaintiff has told the defendant their non-performance is excused,
- Estoppel – where the defendant relies on the plaintiff’s assurances that their non-performance is excused, or
- New contract terms that supersede the original contract.
Remedies for Breach of Contract
If you win your breach of contract claim in court, what is your remedy?
Depending on the facts of your case, the terms of your contracts, and the relief that you requested in your pleadings, you may be entitled to:
- Monetary damages for the “benefit of the bargain” and any foreseeable losses that resulted from the breach,
- An injunction to force the other party to do a thing or to refrain from doing a thing,
- Revision of the contract,
- Rescission or cancellation of the contract,
- Specific performance of the other party’s obligations under the contract,
- Liquidated damages in the amount specified in your contract terms, and
- Attorney fees when provided for in your contract.
Questions About Breach of Contract in SC?
At Coastal Law, our SC breach of contract lawyers file lawsuits, defend lawsuits, and do everything within our power to protect the financial interests of our business clients. We also help our clients to avoid litigation whenever possible…
If you are a SC business owner and you have questions about how to handle a breach of contract, call Coastal Law now at (843) 488-5000 or contact us through our website for a free consultation about how to protect your business.