Breach of Contract

A breach of contract is a failure, without legal excuse, to perform a promise. While this seems simple enough, the vast majority of business litigation stems from breach of contract. It seems that some companies simply don’t care to honor their contractual obligations and the only way for you to get relief is to sue them to enforce the contract and recover your damages.

In Georgia, the non-breaching party in a breach of contract case is entitled to recover “all damages that arise naturally and normally from the breach of contract.” Stated another way, the non-breaching party is entitled to recover all the damages that the parties to the contract envisioned would accrue if the contract was breached. In addition, the non-breaching party is entitled to recover all reasonable expenses incurred in complying with the contract and costs. In addition, the non-breaching party may recover attorneys’ fees and expenses of litigation if it can be proven that the contract was entered into in bad faith, was procured by fraud, or that the defendant (the breaching party) has been stubbornly litigious. Many times, this is referred to as a “so sue me attitude.” In essence, the breaching party is stating by its conduct, “I breached the contract with you but I am not going to pay you your damages. If you want to recover the damages I caused you by breaching our contract, sue me!” This is the exact type of situation in which Georgia law allows one to recover attorneys’ fees and expenses of litigation.

Many times, the measure of damages for breach of contract will be the value of the goods or materials furnished. However, in addition to monetary damages, a party injured by a breach of contract may elect to ask the Court to rescind (e.g., set aside) the contract. This most often occurs in situations in which the damaged party has been injured by a breach of contract and fraud. In this situation, the injured party seeks to have the contract rescinded so that it is not limited by restrictive clauses in the contract that may work to the injured party’s detriment. Once the contract is rescinded, the injured party can seek all damages allowed under the law, including actual damages, attorneys’ fees and expenses of litigation and and punitive damages, to the extent allowed by law. In addition, damages may be awarded along with rescission, if that will put the parties in the position in which they were in prior to the breach.