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Breach of Contract Law

Breach of Contract Law

To establish its contract claim against the defendant, plaintiff must prove that:

1. The parties entered into a contract containing certain terms.

2. The plaintiff did what the contract required the plaintiff to do.

3. The defendant did not do what the contract required the defendant to do. This failure is called a breach of the contract.

4. The defendants breach, or failure to do what the contract required, caused a loss to the plaintiff.

1Weichert Co. Realtors v. Tyan, 128 N.J. 427, 435 (1992) (a contract arises from proper acceptance, and must be sufficiently definite that the performance to be rendered by each party can be ascertained with reasonable certainty.); West Caldwell v. Caldwell, 26 N.J. 9, 24-25 (1958); Friedman v. Tappan Development Corp., 22 N.J. 523, 531 (1956); Leitner v. Braen, 51 N.J. Super. 31, 38-39 (App. Div. 1958).

When a party materially breaches the contract but does not indicate any intention to renounce or repudiate the remainder of the contract, the plaintiff can elect to either continue to perform or cease to perform. If the plaintiff elects to perform, plaintiff is deprived of an excuse for ceasing performance. But even if the plaintiff elects to perform, plaintiff can still sue for any injury or damages suffered because of the material breach. Frank Stamato & Co., v. Borough of Lodi, 4 N.J. 21 (1950).

ANTICIPATORY BREACH

If the defendant clearly indicates through words or conduct before the time for performance arrived, the defendant would not or could not perform the contract; the plaintiff would be entitled to treat that indication as a breach. 1The anticipatory breach must be a material breach to discharge the other party. Ross Systems v. Linden Dari Delite, Inc., 35 N.J. 329 341 (1961). Whether sellers refusal to perform a contract for sale of retail food business constituted, an anticipatory breach is a fact question for the jury. Semel v. Super, 85 N.J.L. 101 (Sup. Ct. 1913). To qualify as a breach, the defendants indication of non-performance must have been definite and clear.

A total breach of contract has occurred when a person who has promised to render performance under a contract thereafter has stated or indicated to the person to whom he/she has promised the performance either that he/she will not or cannot perform that which he/she has promised.

This charge follows the rule set out in Restatement, Contracts (1932) Sec. 318(a). The Restatement language is similar to that in Samel v. Super, 85 N.J.L. 101 (Sup. Ct. 1913) in which the court held that whether sellers refusal to perform a contract for the sale of a retail food business constituted an anticipatory breach was a fact question for the jury. In the course of its opinion the court quoted from ONeill v. Supreme Council, 70 N.J.L. 410 (Sup. Ct. 1904):

Where a contract embodies mutual and interdependent conditions and obligations, and one party either disables himself from performing, or repudiates in advance his obligations under the contract and refuses to be longer bound thereby, communicating such repudiation to the other party, the latter party is not only excused from further performance on his part, but may, at his option, treat the contract as terminated for all purposes of performance, and maintain an action at once for the damages occasioned by such repudiation, without awaiting the time fixed by the contract for performance by the defendant. (at p. 103).

See Parker v. Pettit, 43 N.J.L. 512 (Sup. Ct. 1881); Stopford v. Boonton Molding Company, Inc., 56 N.J. 169 (1970); Scoredisc Service Corp. v. Feldman, 10 N.J. Misc. 228 (Sup. Ct. 1932). Conduct indicating repudiation of a contract has the same effect as language. Ross Systems v. Linden Dari-Delite, Inc., 35 N.J. 329, 340 (1961); Ferber v. Cona, 89 N.J.L. 135 (Sup. Ct. 1916), affd 91 N.J.L. 688 (E. & A. 1918); Stein v. Francis, 91 N.J.E. 205 (Ch. 1919); Storms v. Corwin, 7 N.J. Misc. 931 (Sup. Ct. 1929).

The anticipatory breach must be a material breach to discharge the other party. Ross Systems, supra, at p. 341; Restatement, Contracts (1932), Sec. 397.

As to the remedy for anticipatory breach, see Stopford, supra, (1970) where the anticipatory breach was discontinuance of a pension plan in which plaintiff-employee had vested rights. Discussing the question of damages, Justice Francis said:

Here, the plaintiff was presented with a clear choice of alternative remedies, i.e., specific performance which would produce periodic payments or a lump sum recovery which he chose to pursue. (at p. 195)

Where defendant repudiates the contract, after plaintiff has performed, plaintiff may be entitled to restitution of what he gave, as an alternative remedy. Shea v. Willard, 85 N.J. Super. 446, at 451 (App. Div. 1964).

A plaintiff who is awarded a verdict for breach of contract is entitled to compensatory damages for such losses as may fairly be considered to have arisen naturally from the defendants breach of contract. Alternatively, plaintiff may be entitled to such damages as may reasonably be supposed to have been contemplated by both parties, at the time they made the contract, as the probable result of the breach of such contract.

Compensatory damages for breach of contract are designed under the law to place the injured party in as good a monetary position as he/she would have enjoyed if the contract had been performed as promised.

Cases:

525 Main Street Corp. v. Eagle Roofing Co., 34 N.J. 251 (1961); Marcus & Co, Inc. v. K.L.G. Baking Co., Inc., 122 N.J.L. 202 (E. & A. 1939).

the law provides that the plaintiff is to be reasonably compensated for any damage sustained by him/her which was proximately caused by the defendants conduct in breach of the contract. In arriving at the amount of the award, you should include all damages suffered by the plaintiff because of lost profits within the reasonable contemplation of the parties at the time of the making of the contract; that is to say, profits which the plaintiff would have made but for the breach of the contract by the defendant.

If you find that the plaintiff has in fact suffered loss of profits as a result of the defendants breach of contract, then the fact that the precise amount of plaintiffs damages may be difficult to ascertain should not affect the plaintiffs recovery. The plaintiff is to be awarded damages for such loss of profits as is capable of determination with reasonable certainty.

In arriving at the amount of any loss of profits sustained by the plaintiff, you may consider any past earnings of the plaintiff in his/her business, as well as any other evidence bearing upon the issue.

Cases:

Van Dusen Aircraft Supplies, Inc. v. Terminal Const. Corp., 3 N.J. 321 (1949); Feldman v. Jacob Brasfman & Son, Inc., 111 N.J.L. 37 (E. & A. 1933); Interchemical Corp. v. Uncas Printing & Fin. Co., Inc., 39 N.J. Super. 318, 329 (App. Div. 1956) a defendant whose wrongful act creates the difficulty may not complain that the amount of damages cannot be accurately fixed; Casler v. Weber, 27 N.J. Super. 396 (App. Div. 1953); De Ponte v. Mutual Contracting Co., 18 N.J. Super. 142, 147, 148 (App. Div. 1952); Restatement, Contracts, Sec. 331 (Where the evidence does not afford a sufficient basis for a direct estimation of profits, but the breach is one that prevents the use and operation of property from which profits would have been made, damages may be measured by the rental value of the property or by interest on the value of the property.)


Kenneth Vercammen was the Middlesex County Bar Municipal Court Attorney of the Year

   
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Kenneth Vercammen was the Middlesex County Bar Municipal Court Attorney of the Year
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Kenneth Vercammen is the Managing Attorney at Kenneth Vercammen & Associates in Edison, NJ. He is a New Jersey trial attorney has devoted a substantial portion of his professional time to the preparation and trial of litigated matters. He has appears in Courts throughout New Jersey each week for litigation and contested Probate hearings.

Mr. Vercammen has published over 125 legal articles in national and New Jersey publications on elder law, probate and litigation topics. He is a highly regarded lecturer on litigation issues for the American Bar Association, NJ ICLE, New Jersey State Bar Association and Middlesex County Bar Association. His articles have been published in noted publications included New Jersey Law Journal, ABA Law Practice Management Magazine, and New Jersey Lawyer.

He is chair of the Elder Law Committee of the American Bar Association General Practice Division. He is also Editor of the ABA Estate Planning Probate Committee Newsletter and also the Criminal Law Committee newsletter. Mr. Vercammen is a recipient of the NJSBA- YLD Service to the Bar Award. And past Winner "General Practice Attorney of the Year" from the NJ State Bar Association. He is a 22 year active member of the American Bar Association. He is also a member of the ABA Real Property, Probate & Trust Section.

He established the NJlaws website which includes many articles on Elder Law. Mr. Vercammen received his B.S., cum laude, from the University of Scranton and his J.D. from Widener/Delaware Law School, where he was the Case Note Editor of the Delaware Law Forum, a member of the Law Review and the winner of the Delaware Trial Competition.

RECENT SPEAKING ENGAGEMENTS ON WILLS, ELDER LAW, AND PROBATE

Edison Adult School -Wills, Elder Law & Probate- 2007, 2006, 2005, 2004, 2003, 2002 [inc Edison TV], 2001, 2000,1999,1998,1997
Nuts & Bolts of Elder Law - NJ Institute for Continuing Legal Education/ NJ State Bar ICLE/NJSBA 2008, 2007, 2006, 2005, 2004, 2003, 2002, 2000, 1999, 1996
Elder Law and Estate Planning- American Bar Association Miami 2007
Elder Law Practice, New Ethical Ideas to Improve Your Practice by Giving Clients What They Want and Need American Bar Association Hawaii 2006
South Plainfield Seniors- New Probate Law 2005, East Brunswick Seniors- New Probate Law 2005
Old Bridge AARP 2002; Guardian Angeles/ Edison 2002; St. Cecilia/ Woodbridge Seniors 2002;
East Brunswick/ Halls Corner 2002;
Linden AARP 2002
Woodbridge Adult School -Wills and Estate Administration -2001, 2000, 1999, 1998, 1997, 1996
Woodbridge Housing 2001; Metuchen Seniors & Metuchen TV 2001; Frigidare/ Local 401 Edison 2001; Chelsea/ East Brunswick 2001, Village Court/ Edison 2001; Old Bridge Rotary 2001; Sacred Heart/ South Amboy 2001; Livingston Manor/ New Brunswick 2001; Sunrise East Brunswick 2001; Strawberry Hill/ Woodbridge 2001;
Wills and Elder Law - Metuchen Adult School 1999,1997,1996,1995,1994,1993
Clara Barton Senior Citizens- Wills & Elder Law-Edison 2002, 1995
AARP Participating Attorney in Legal Plan for NJ AARP members 1999-2005

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