Breach of Contract Case Study

JIGAR NAROLA

CALIFORNIA BAPTIST UNIVERSITY

FOUNDATIONS OF MANAGEMENT

BREACH OF CONTRACT

28 FEBRUARY, 2017

Contract breach is a breach when two parties or individuals are entitled to certain condition on working together and one of the party breaks them or does not abide to the condition. In a contract breach the innocent party can file a lawsuit against the defendant. There are a lot of case where there is a breach of contract, such cases are first handled by the trail court and later can be fought in the court of appeal if either of the parties are not satisfied with the decisions of the trail court and then if may also go further to a higher court.

The U.S. court system is:

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An example of a case of breach of contract is the case of jerry’s Hardware, L.L.C. v. Hillcrest Partners, No. 14-1625, 2015 Iowa App. LEXIS 654 (July 22, 2015)

Jerry’s Hardware, L.L.C. v. Hillcrest Partners

In this case Jerry’ hardware, plaintiff, enter and signed a lease agreement were Hillcrest

Partners agreed to lease a commercial space that they were planning to build. Hillcrest partners agreed to build the commercial space according to Jerry’s hardware’s requirements. Jerry’s hardware informed Hillcrest that they were buying inventor, fixtures and electronic for the store at the rate of $100,000.

Hillcrest partners’ neve started the construction as they were not able to acquire the required finance. The attorney of Jerry’s hardware sent two letter to the defendant requesting information and explanation regarding the delay and stating that they were not interesting in terminating the contract. The second letter included the items and the loss which the plaintiff has incurred due to the failure of the defendant. Hillcrest partners did not answer any of the letters and they were also not interested in terminating the lease.

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To reduce the amount of loss, the plaintiff leased another complex for its store. The new location was less visiblw and it required a large amount of renovation and upgrades. It also required an upgrade in the electrical system and the paint system. The plaintiff later found that the equipment he purchased in 2010 were not up to the requirement in 2012. Later, in 2013, Jerry’s Hardware files a lawsuit against Hillcrest for breach of contract. After a bench trail the court , the court found that the defendant had breached the contract and awarded the plaintiff an amount of $100,444.77 in unexpected damages, cost of new electrical systems and new paint system and the amount of new equipment’s.

Court of Appeals Decision:

After the decision in the of the trail court, the defendant registered in the court of appeal. The court of appeal supported the decision of the trail court. The defendant argued that the contract was not enforceable as they were not able to attain finances, which was one of the “condition precedent” in the contract. The court of appeal stated that the contract was enforceable, the court found that keeping in mind the other conditions in the contract, nonfulfillment of “condition percent” only gave the defendant to terminate the contract by giving a written notice to the plaintiff, and as the defendant did not choose the option to terminate the contract, the contract was still valid. But, the court of appeal made a change in the decision that the defendant was not liable to pay for the plaintiff’s damage of the property which was in the storage because it was the plaintiffs responsibility to store in a storage where

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Conclusion of the case:

The case was a twist as “condition precedent” were not the condition precedent at all, in fact they were overruled due to other conditions in the contract. The district court did not abuse its discretion in its determinations on Hillcrest’s multiple motions to continue the trial. The court properly determined the lease agreement was enforceable between the parties.

When an individual or a business is involved in a breach in contract it is liable to and entitled to provide remedy to the the non-breaching individual or business. There are different types of remedies:

  • Damages- This is the most common remedy for a breach of contract. The breaching party has to pay the sum of loss amount of the damage incurred by the non-breaching party due to their conduct. There are many kinds of damages.
  1. Compensatory damages, is when the non-breaching party is kept in a position same as if the breach had not been occurred.
  2. Punitive damage, are the damage that the breaching party must pay to the non-breaching party in full. This remedy is used when the breach is done in wrong full manner.
  3. Nominal damage, is the remedy in which the breach party has to pay a nominal amount and no actual loss is made by the non-breaching party.
  4. Liquidated damages, are the damages that were identified by the parties in their contract.
  • Specific performance-

This remedy is used when damages are not adequate to as a remedy. In specific performance, the breaching party is order to fulfill their duty as mentioned in the contract. This remedy is used when the issue of money does not matter in the contract such as contract for selling a property and later the seller refuses, the court can order the seller and compel him to sell the house as per the contract.

  • Cancellation and restitution-
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Restitution as a remedy mean that the non-breaching party is put back in a positon that it was in prior to the contract and cancellation means that both the parties are free for the obligations of the contract.

In the case of Jerry’s Hardware, L.L.C. v. Hillcrest Partners the remdy that was used was the remedy of damages. There a few things that the defendant must have considered to avoid a lawsuit for breach of contract, Hillcrest should have not signed a contract until and unless they were not sure of their finance. Signing a contract without their finance increased their risk of breaching it and secondly they should have replies to the letters that were send to them by jerr’s attorney.

References

  • Two Iowa Breach of Contract Cases, Two Judgments for Plaintiffs | Center for Agricultural Law and Taxation. (2015, July 23). Retrieved March 01, 2017, from
  • JERRY’S HARDWARE, L.L.C., Plaintiff-Appellee/Cross-Appellant, vs. HILLCREST PARTNERS, a general partnership, CHARLES A. RUHL JR., and STEVEN FRY, Defendant-Appellants/Cross-Appellees. (n.d.). Retrieved March 01, 2017, from
  • Breach of Contract and Lawsuits. (n.d.). Retrieved March 01, 2017, from
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