Breach of contract can be overwhelming. A breach of contract occurs when one party doesn’t hold up their end of the deal and you end up in a legal dispute and financial loss. Knowing the types of breaches, remedies and statute of limitations for filing a lawsuit is key to protecting yourself. Work with an experienced Clemson contract disputes attorney to get the guidance and expertise you need.
This is a guide on what is a breach of contract and statute of limitations to file a lawsuit. The information provided does not constitute legal advice and is intended for general educational purposes only.
Breach of Contract
A breach of contract occurs when one party doesn’t fulfill their obligations as stated in the contract. In SC, the legal system divides breaches into two main types: material and non-material. Knowing the difference between the two is key to determining the remedies and the outcome of a contract dispute.
Material Breach
A material breach is a major violation that undermines the whole contract. This type of breach occurs when one party’s failure to perform is so significant that it renders the entire contract impossible for the other party to get what they were promised.
For example, if a contractor is hired to build a house and doesn’t build it to the specifications agreed upon, that would be a material breach. In those cases, the non-breaching party can typically terminate the contract and seek damages for the losses caused by the breach.
Non-Material Breach
On the other hand, a non-material breach, also known as a minor breach, is a slight deviation from the contract that doesn’t impact the overall purpose of the contract. This type of breach might occur if a contractor is a few days late or makes a small mistake that doesn’t affect the functionality or value of the work.
While a non-material breach may not be grounds to terminate the contract, the non-breaching party may still be able to recover damages for the direct losses caused by the breach. The key difference here is that the main objectives of the contract can still be met despite the minor breach.
Remedies for Breach of Contract
When a breach of contract occurs the non-breaching party has several options to address the situation. These remedies are designed to compensate the non-breaching party for the losses caused by the breach and to make the contract fair.
In SC, remedies for breach of contract are divided into two types: legal remedies and equitable remedies.
Legal Remedies
Legal remedies are monetary and are the most common type of relief sought in breach of contract cases. The purpose of legal remedies is to put the non-breaching party in the position they would have been in had the breach not occurred. The most common legal remedy is expectation damages.
Expectation damages put the non-breaching party in the position they would have been in had the breach not occurred. For example, if a supplier doesn’t deliver goods as agreed, the non-breaching party may seek damages for the difference between the contract price and the cost of getting the goods elsewhere.
Equitable Remedies
Equitable remedies are non-monetary and are granted at the court’s discretion when legal remedies don’t address the harm caused by the breach. These remedies are designed to be fair and just for the non-breaching party and may include specific performance, injunctions, and restitution.
Specific performance is a court order that forces the breaching party to perform their contractual obligations. This remedy is typically used for unique goods or property like real estate where monetary damages wouldn’t be enough to compensate the non-breaching party. Injunctions are court orders that require the breaching party to stop doing something that violates the contract. This remedy is often used in non-competition agreements or intellectual property disputes.
Restitution puts the non-breaching party back in the position they were in before the contract was made. This remedy is used when the non-breaching party has conferred a benefit on the breaching party and it would be unfair for the breaching party to keep that benefit without compensating the non-breaching party.
Statute of Limitations in South Carolina
Understanding the statute of limitations laws is crucial when dealing with a breach of contract in SC. Adhering to filing deadlines is essential to avoid being barred from seeking legal recourse. The statute of limitations sets a deadline for how long a party has to file a lawsuit after a breach has occurred. If you want to enforce your contractual rights or defend against a claim, you need to understand this timeframe.
Standard Time Frame
In South Carolina, the standard statute of limitations for a breach of contract lawsuit is a three-year statute. This period starts when the breach is discovered or should have been discovered through reasonable diligence. It applies to written and oral contracts, although some types of contracts have different limitations periods set by statute. Knowing when this clock starts is critical as missing the deadline will bar the non-breaching party from seeking legal relief in court.
Exceptions and Special Considerations
While the general rule is 3 years, there are exceptions and special circumstances that can extend or toll the statute of limitations. For example, contracts involving fraud, misrepresentation or other intentional misconduct may have different limitations periods. Certain deadlines may vary based on when the breach is discovered or when the event occurs, whichever occurs first.
If a contract specifies a different period for bringing claims or if a party is legally unable to bring a lawsuit due to disability or incapacity, the limitations period may be extended or tolled. Also, a longer warranty period in a contract does not extend the statute of limitations for a breach of contract claim in SC.
Practical Considerations
The statute of limitations has practical implications for both parties to the contract. For the non-breaching party, it means to act quickly when a breach is discovered to preserve their right to legal remedy. For the breaching party, it means understanding the liability period and managing the risk. Both parties should keep good records and be mindful of contract performance to meet the legal deadline.
When Does the Limitation Period Start?
When the statute of limitations starts to run is a key aspect of breach of contract claims in SC. The starting point of the limitation period, known as the “accrual” of the claim, depends on when the breach is discovered or when it should have been discovered through reasonable diligence. Understanding this concept is crucial for both parties to a contract dispute. In North and South Carolina, the legal timeframes for filing breach of contract claims differ, with each state having specific statutes of limitations and statutes of repose. Consulting local legal professionals is essential for accurate advice.
Discovery of the Breach
In SC, the statute of limitations for breach of contract starts when the breach is discovered or should have been discovered by the non-breaching party. This is often referred to as the “discovery rule”. The discovery rule puts a duty on the non-breaching party to be reasonably diligent in monitoring the performance of the contract.
In construction contracts, the statute of limitations may start at the point of substantial completion of the project. Suppose a party fails to recognize a breach that could have been discovered with reasonable effort. In that case, the statute of limitations will start to run from when the breach could have been reasonably discovered, not when it was discovered.
Reasonable Diligence
The concept of reasonable diligence is a standard used by the courts to determine when a breach should have been discovered. This means the non-breaching party must take proactive steps to monitor and evaluate the performance of the contract. What is reasonable diligence can vary depending on the contract and the parties involved.
For example, in commercial contracts with ongoing performance, regular inspections and monitoring may be necessary to catch potential breaches. Failing to exercise reasonable diligence can mean losing the right to sue if the statute of limitations runs before the breach is discovered. In cases of sexual abuse, the statute of limitations can be extended based on the age of the victim and the discovery of the abuse.
Speak With an Experienced Clemson Contract Disputes Attorney ASAP!
If you are dealing with a breach of contract or facing a potential contract dispute, don’t wait to seek legal assistance. The clock is ticking on your ability to take action and protect your rights. For personal injury claims, including false imprisonment, it is crucial to seek legal assistance promptly to navigate the statute of limitations.
Contact our team at 864-745-9758 to discuss your case and explore your options!
