What is a breach of contract and what can you do about it?There are oral contracts and written contracts. In Ohio, an oral contract is just as valid as a written contract. A contract can be formed through email or text message. While oral contracts are just as valid as written contracts it is quite a bit harder to prove what the terms of an oral contract are when it is one person's word against another.
Most people will want a contract in place when they are paying somebody to do something or they are entering into a business relationship or venture. A contract is usually breached when one party to the agreement doesn't do what they were paid to do. In a business relationship things can be a bit more complicated in that both parties may be taking a series of actions that are somewhat dependent upon each other and the remedy for a breach of contract should be spelled out in the contract itself.
In order to know if you might have a breach of contract case, you must first know whether or not you have a valid and enforceable contract.
Ohio Rules for Formation of a ContractIn Ohio, a valid contract consists of an offer, acceptance, and consideration. Tersigni v. Gen. Tire, Inc. (1993), 91 Ohio App.3d 757, 760, 633 N.E.2d 1140. A meeting of the minds as to the essential terms of the agreement is a requirement to enforcing the contract. Episcopal Retirement Homes, Inc. v. Ohio Dept. of Indus. Relations (1991), 61 Ohio St.3d 366, 369, 575 N.E.2d 134. To understand the basic concept of the formation of a contract, it may be helpful to think of hiring a neighbor kid to mow your lawn. If you offer to pay the neighbor $20 to mow your lawn, then that counts as an 'offer.' The neighbor can accept the offer either by saying "I accept" or by starting to mow your lawn. The 'consideration' is the most complicated aspect of contract formation, but essentially it means that each side has a benefit and a detriment. For the person paying to have their lawn mowed, the benefit is getting a freshly cut lawn and the detriment is having to pay $20 for it. For the neighbor kid, the benefit is getting $20 and the detriment is having to work to mow the lawn. A meeting of the minds must also occur in order to enforce the contract. If you intended to pay the neighbor $20 to mow the lawn out on your rental property in Delaware County and the neighbor thought you were talking about your lawn at your Columbus property, then there was no meeting of the minds.
With that said, if you are planning on entering into an agreement to have something important or expensive done, then you should make sure you have a written contract in place to make sure that everybody has a clear understanding for what is to be done.
Breach of ContractIn general, a breach of contract occurs when one party doesn't do what they said they were going to do. It is at this point where you think the other party might breach your agreement or if they already have breached the agreement that you will want to get an attorney involved to try to correct the situation before it gets worse.
In Ohio, there are different laws that might apply to your situation depending on what the subject matter of your contract was and the types of people involved. Your breach of contract lawsuit could be governed under the Uniform Commercial Code (UCC), Ohio common law, or Ohio consumer protection laws. The things that you have to do to try to remedy the situation or actions you have to take before filing a lawsuit change depending on which set of Ohio laws apply to your situation. This is why you will want to get an attorney involved before proceeding further at this stage. The law firm of Harris & Engler handles breach of contract actions all over Ohio and is conveniently located in Columbus, Ohio.
Statute of Limitations for Breach of ContractIn Ohio, the statute of limitations to file a lawsuit for breach of a written contract is 8 years and 6 years for breach of an oral contract. The statute of limitations begins to run on the date the cause of action accrues, which is usually the date of the breach of the contract. See Ohio Revised Code sections 2305.06 and 2305.07.
Damages for Breach of ContractPunitive damages are not available in Ohio for breach of contract (unless it is an insurance contract and then it is technically a "bad faith" action). "Damages for breach of contract are designed to place the aggrieved party in the same position it would have been in had the contract not been breached." State ex rel. Stacy v. Batavia Local School Dist. Bd. of Edn., 105 Ohio St.3d 476 (2005). In other words, a party who was damaged by a breach of contract "is entitled to those damages which might have been expected by the parties as a natural result of a breach; those damages which might have been in the contemplation of the parties at the time of the breach, having in mind all the circumstances known to them when they dealt with one another." R & H Trucking, Inc. v. Occidential Fire & Cas. Cos. of N. Carolina (1981), 2 Ohio App.3d 269, 272.
Usually with a breach of contract case, the damages do not exceed the price paid in the underlying contract or the value of the underlying contract. There are some exceptions to this, however. Contracts can contain liquidated damages clauses which award extra damages against the party that breached. Contracts also sometimes contain an attorney fee provision that provides that if one party breaches the contract and they lose a breach of contract lawsuit then they have to pay the winner's attorney fees. Generally, if there are any extra damages available in a breach of contract action, like liquidated damages or attorney fees, then the underlying contract has to specfiically list those things as extra damages. If the contract doesn't mention them then they are not available in a later breach of contract lawsuit.