Breach of Contract: What Am I Entitled To?
Updated: 5 days ago
Our Columbus business litigation law firm receives many calls regarding breach of contract. Outside of car accidents, contractual disputes are probably the most litigated topic in the country. However, many clients are unaware of what their legal remedy actually is once a contract is breached. Further, the legal remedy often depends upon the type of contract involved, including specific remedies provided in the contract, the extent of the breach, as well as actions taken by the nonbreaching party. In this blog post, our Columbus commercial litigation lawyer will attempt to answer the most common breach of contract questions he receives.
Can I Recover My Attorney Fees?
This is the most common question I am asked. The company that breached the contract will have to reimburse me for my attorney fees if I win, right? Like most legal questions, it depends. Unless the contract specifies that the losing party will be responsible for attorney fees in the action, then you will not recover your attorney fees in a breach of contract case, even if you win. Most states, including Ohio, follow the American rule when it comes to attorney fees. Under the American rule, “a prevailing party in a civil action may not recover attorney fees as a part of the costs of litigation.” Wilborn v. Bank One Corp., 121 Ohio St. 3d 546, 2009-Ohio-306, 906 N.E.2d 396, ¶7.
This is where it pays to retain a Columbus contracts attorney to review a contract prior to signing. So long as the contract provides that you will receive attorney fees in the event of a breach, then you get them. If an attorney provision is not included, then you are typically out of luck.
Can I Make the Breaching Party Perform Under the Contract?
The answer to this question is almost always no. Typically, your company will only be awarded money when a contract is breached. However, there are a few notable exceptions when a court of law will force a breaching party to perform under the Agreement, rather than just pay money.
The most notable exception are real estate contracts. Generally, so long as marketable title can be conveyed, if a person breaches a contract to sell real estate, the court will actually force that party to buy or sell the property for the price specified in the contract.
Another exception is contracts to purchase unique objects. Under this exception, the object would have to be so unique that no amount of money would make the non-breaching party whole. In other words, the item is so rare that it’s highly unlikely you can purchase another one with any amount of money. Abdulla v. Matasy, 185 N.E.2d 313, 315 (7th Dist. 1961). Some cases have held that contracts to purchase a business also fall within this category. Mr. Mark Corp. v. Rush, Inc., 11 Ohio App. 3d 167, 172, 464 N.E.2d 586 (8th Dist. 1983).
The last major category are output and requirements contracts. A requirements contract is when a seller agrees to provide a seller with all of a particular good it requires. For instance, imagine an automobile manufacturer contracting with a company to provide it with all of the engines it needs in its like of pickup trucks. An output contracts is when a buyer agrees to purchase all or a percentage of a seller’s output for a particular good.
How Much Money Am I Entitled To?
Generally, when a party breaches a contract, a court will seek to place the non-breaching party in a place it would have been in had the contract been fully performed. This is known as expectation damages.
For instance, suppose a construction company enters a contract to build a commercial building for ten million dollars. The cost of the actual construction is expected to be 8 million, and the construction company expects to profit by 2 million dollars. Suppose that the construction company is midway through the construction, has spent 5 million dollars on the project in labor and materials thus far, and has not yet received any payments for the project. Suddenly, the customer cancels the contract and the construction company has to bring a lawsuit. The construction company will be awarded 7 million dollars. 5 million for its costs and expenses and 2 million for its expected profits. The construction company is not entitled to the full 10 million dollars because this would mean it profited 5 million dollars from this project, when it only expected to profit by 2 million dollars; hence the name expectation damages.
Our Business Litigation Law Firm in Columbus Can Assist With Your Breach of Contract Cases.
With anything in the law, remedies can vary depending on the particular circumstances of each case, including the underlying facts as well as the language in the contract. If you are being sued or need to sue someone else over a breach of contract issue, please give me a call so I can determine how I can best assist you and your company.