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Damages for breach of contract will vary with the facts

| Dec 25, 2014 | Business Contracts & Disputes |

When a business in North Carolina is in a contractual relationship with a person or another business, it relies on getting a certain return from the transaction. The parties can memorialize the agreement by reducing it to a writing and sometimes will even state their expectation interests in the instrument. If there is a breach of contract, the non-breaching party may sue the breaching party for the particular remedy that seems most appropriate under the circumstances.

In one recent example, a supplier of floor mats, mops, towels and accessories had a five-year contract with six gas stations. The supplier sued all six stations, alleging breach of a written contract for a five-year duration. It’s unclear if the gas stations are under one common ownership, but that is probable because the complaint alleges that they all broke the contract on the same date.

The supplier alleges that the stations breached the contract by failing to pay for the items provided each month. There may be a reason for the refusal to pay. For example, the products supplied by the plaintiff may have been of low quality and not of the type promised in the contract. The plaintiff may have failed to provide the right items in a number of other respects.

Whether the defendants will allege a defense to the complaint remains to be seen. If there was in fact a breach of contract by the defendants, the plaintiff can sue for his expectation interest in this type of situation. Thus, the plaintiff expected to derive a certain income from the contract, and that is the expectation interest that it has lost.

In this case, the plaintiff sued for $34,205.77, which represents the balance of the services due for the remainder of the five years. The plaintiff also seeks 18 percent interest and 25 percent in legal fees. In North Carolina and elsewhere, the specification of legal fees and interest in the event of a breach of contract is a provision that is generally valid and enforceable against the breaching party.

Source: louisianarecord.com, “Gas station supplier seeks $34K in breach of contract suit“, Kyle Barnett, Dec. 15, 2014

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