Breach of Contract Law in South Carolina

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In South Carolina, a breach of contract is considered a broken legal promise to take or not take an action. The three required elements of a claim for breach of a contract are whether:

  1. A valid contract exists between the parties.
  2. One or more of the parties breached the contract.
  3. Whether a party suffered damages because of the breach.

Potential Court Remedies for a Breach of Contract

If a breach is found, the court can order one of several remedies:

  • Award financial damages to make the wronged party whole.
  • Demand specific performance to compensate the wronged party.
  • Or allow the cancellation of the contract and payment of restitution to the party harmed for money lost.

Damages Available for Breach

Four types of financial damages are available after a breach of contract in South Carolina:

  1. Compensatory damages:‌ Put the non-breaching party in the position they would be in if the contract had been performed.
  2. Liquidated damages‌: An amount stated in the terms of the contract in the case where actual monetary damages would be difficult to determine.
  3. Punitive damages:‌ Punish the breaching party for an intentional and/or malicious breach.
  4. Other costs:‌ Court costs and, in some cases, attorney's fees.

The court awards the winning party in the lawsuit damages to compensate them for the loss they suffered. In situations when both parties have breached the contract, the court may choose to award damages to the party that has suffered the greater loss.

The exceptions to this are when the first party’s breach caused the second party’s breach, or when the first party who suffered the smaller loss breached the contract intentionally and/or maliciously.

Breach of Real Estate Contract

According to South Carolina law, a real estate contract must be in writing and be signed by the party who is buying the property. A typical real estate contract contains a number of standard provisions, including:

  • Address.
  • Names of parties.
  • Selling price.
  • Closing date and costs.
  • Expiration date of offer.
  • Additional terms and contingencies, such as a sale conditional upon the buyer’s approval for a mortgage; buyer’s score on a credit check; clarification of who will pay property taxes for the year; and type and quality of the title being conferred by the seller.

If a party breaches a real estate contract, the court can award money damages to the non-breaching party. These range from deposit money and reasonable expenses to punitive damages.

The court can also end the contract and order the breaching party to refund the other party’s deposit, plus reasonable expenses. The court usually takes this action if the contract is unenforceable. Last, the court can order specific performance, the requirement that the contract be followed according to its terms.

Commercial Contract Disputes Between Merchants

In a commercial contract between merchants – buyers and sellers of goods – parties typically seek coverage from their insurer for losses caused by a breach. South Carolina law clarifies exactly how a breach effects the risk of loss.

If the seller delivers goods that fail to conform to the contract, the buyer has a right to reject them. The risk of loss remains on the seller until the seller “cures” the situation. They can do this by providing suitable alternate goods or by the buyer accepting the goods provided.

If the buyer revokes their acceptance of the contract, they may, to the extent of any deficiency in their insurance, treat the risk of loss as having rested on the seller from the beginning.

When a Buyer Does Not Accept the Goods

At times the buyer will not accept conforming, or suitable alternate goods. They may also otherwise be in breach before the risk of loss passes to them. Then the seller may, to the extent of their deficiency in insurance, treat the risk of loss as resting on the buyer for a commercially reasonable time.

The length of such a time is determined by the contract as well as the standard for the industry and the particular situation.

Types of Contract Breaches

The four types of contract breaches are:

  1. Minor breach:‌ Inconsequential breach after which the contract is still viable.
  2. Material breach:‌ Large breach after which the contract is still viable.
  3. Fundamental breach:‌ Large breach after which the contract is usually not viable.
  4. Anticipatory breach:‌ Breach that a party engages in before full performance.

A party who has suffered damages from a breach of contract can sue the breaching party for any level of breach. A cause of action for a breach can fit one or more classifications, including failure to:

  • Pay a certain amount of money by the date required by the contract, which could be a material breach or a fundamental breach.
  • Provide goods or services required by the contract, which could be a major breach or a fundamental breach.
  • Complete the first set of services on a certain date as required by an installment contract, which could be an anticipatory breach, a minor breach, a major beach or a fundamental breach.

How to Bring a Lawsuit for Breach of Contract

A party can sue another party for breach of contract by bringing a civil suit in the appropriate court in South Carolina. They can include other claims in their lawsuit, such as fraud. The appropriate court will be a magistrate court if the amount of damages is $7,500 or less, or a court of common pleas if the amount is over $7,500.

If the contract regards an estate, the plaintiff should file the lawsuit in probate court. They should sue the defendant in the county where the contract was formed or where the defendant resides or has their principal place of business.

How a Lawyer Can Help

A lawyer that specializes in contracts can assist the parties by helping them negotiate a settlement or by representing a party in a trial. Typically each party has their own lawyer to represent their unique interests.

A single attorney cannot represent both parties because that would constitute a conflict of interest since the parties’ interests are not the same. A lawyer cannot require a client to sign a disclaimer, a statement that the lawyer or law firm will not be legally responsible for damages resulting from malpractice.

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