Breach of Contract Frequently Asked Questions

A contract dispute can disrupt a business's cash flow, operations, customer relationships, and future plans. The following answers provide general information about breach of contract claims under Ohio law.

1. What is a breach of contract?

A breach of contract occurs when a party fails to perform a contractual obligation without a valid legal excuse. Examples include failing to pay, delivering incomplete or defective work, missing a required deadline, refusing to provide agreed services, or violating confidentiality or non-compete provisions.

A breach may be material or non-material. A material breach substantially defeats the purpose of the agreement and may allow the non-breaching party to seek damages or treat its own future performance as excused. The specific contract language and circumstances determine the legal effect of the breach.

2. What are the elements of a breach of contract claim in Ohio?

Generally, a party pursuing a breach of contract claim in Ohio must establish:

●       A valid and enforceable contract;

●       The claimant performed its obligations or had a legal excuse for nonperformance;

●       The other party breached the contract; and

●       The breach caused resulting damages.

The contract may be written, oral, or implied, although some agreements must be in writing under Ohio's statute of frauds. The contract's terms, the parties' conduct, and the available evidence all may affect whether a claim can succeed.

3. What kinds of contracts can support a breach of contract claim?

A breach of contract claim may involve a written agreement, an oral agreement, or an implied contract created by the parties' conduct. Examples include service agreements, vendor contracts, sales agreements, commercial leases, partnership agreements, employment agreements, and business purchase agreements.

Ohio's statute of frauds, including Ohio Revised Code § 1335.05, requires certain agreements to be in writing and signed to be enforceable. This may include certain contracts involving an interest in real estate, promises to answer for another person's debt, and agreements that cannot be performed within one year. Separate writing requirements may apply to sales of goods, including contracts subject to Ohio Revised Code § 1302.04. Whether an oral agreement is enforceable depends on the contract and the facts.

4. What damages are available for breach of contract?

Depending on the circumstances, available remedies may include:

●       Compensatory damages: Losses intended to place the injured party in the position it would have occupied if the contract had been performed.

●       Consequential damages: Additional losses that were foreseeable when the parties entered into the contract and were caused by the breach.

●       Reliance damages: Reasonable expenses incurred in reliance on the agreement.

●       Liquidated damages: A specific amount agreed upon in the contract, if the provision is legally enforceable rather than an unlawful penalty.

●       Specific performance or injunctive relief: In appropriate cases, a court may order performance or prohibit conduct rather than award money alone.

●       Rescission or restitution: In some circumstances, a party may seek to undo the agreement and recover amounts paid.

A claimant generally must prove that the damages were caused by the breach and were reasonably ascertainable. The claimant also may have a duty to take reasonable steps to mitigate avoidable losses.

5. What is anticipatory repudiation, and how does it affect a claim?

Anticipatory repudiation occurs when, before performance is due, a party clearly and unequivocally communicates through words or conduct that it will not perform a contractual obligation.

The non-breaching party may have options, depending on the contract and circumstances. Those options may include treating the repudiation as an immediate breach, pursuing available remedies, or continuing to await performance. A party should carefully review the agreement and avoid taking actions that could be viewed as accepting the repudiation, waiving the breach, or failing to mitigate damages.

6. What defenses are commonly raised to a breach of contract claim?

Common defenses may include:

●       No valid or enforceable contract was formed;

●       The person who signed lacked authority;

●       The claimant failed to perform its own obligations;

●       A required condition precedent did not occur;

●       The alleged breach was excused, waived, cured, or caused by the claimant;

●       The contract was modified, rescinded, or replaced by a later agreement;

●       Impossibility, impracticability, frustration of purpose, or another legal excuse applies;

●       The claim is barred by the statute of limitations;

●       The damages were not caused by the alleged breach or were not proven with reasonable certainty; or

●       The contract contains an arbitration, limitation-of-liability, notice, cure, or other provision affecting the claim.

The applicable defenses depend on the contract language and the parties' conduct.

7. What evidence do I need to prove a breach of contract claim?

Important evidence may include:

●       The signed contract and all amendments, addenda, and exhibits;

●       Emails, letters, text messages, and other communications;

●       Invoices, payment records, purchase orders, and delivery records;

●       Evidence showing the claimant's performance;

●       Notices of breach, demands to cure, and responses;

●       Business records showing lost revenue, additional expenses, or other damages;

●       Documents concerning termination, cancellation, or repudiation;

●       Witness testimony about negotiations and performance; and

●       Expert analysis when damages, accounting, construction, technical performance, or industry standards are disputed.

Businesses should preserve relevant electronic communications and records and should avoid altering or discarding the disputed work, goods, or documents.

8. Can attorney fees be recovered in an Ohio breach of contract case?

Ohio generally follows the American Rule, meaning each party ordinarily pays its own attorney fees. Attorney fees may be recoverable in some circumstances, including when:

●       The contract contains an enforceable attorney-fee provision;

●       A statute authorizes an award of fees;

●       The opposing party acted in bad faith, vexatiously, wantonly, or oppressively; or

●       Another recognized exception applies.

A contractual attorney-fee provision is not automatically enforceable in every situation. Its wording, the parties' relationship, the reasonableness of the fees, and applicable law may affect whether fees can be awarded.

9. What is the statute of limitations for breach of contract in Ohio?

The applicable deadline depends on the type of contract and claim. Contrary to a common misconception, Ohio's general statute for actions on written contracts is generally six years under Ohio Revised Code § 2305.06, unless a specific exception applies. Ohio Revised Code § 2305.07 generally provides a four-year period for contracts not in writing, subject to statutory exceptions. Claims involving the sale of goods may be governed by the Uniform Commercial Code, including Ohio Revised Code § 1302.98, which generally provides a four-year period.

Ohio Revised Code § 2305.09 generally addresses certain non-contract claims, including specified fraud and other tort claims, and is not the general four-year statute for written contracts. Contract provisions, accrual rules, continuing breaches, discovery issues, tolling, and special statutory deadlines may change the analysis. A business should consult an attorney promptly rather than rely on a general limitations period.

10. When should I contact a business litigation attorney?

You should consider contacting a business litigation attorney as soon as a serious contract dispute develops—ideally before sending a demand, terminating the agreement, withholding payment, signing a release, or making an admission. Early legal review can help identify notice and cure requirements, preserve evidence, evaluate damages, assess defenses, and determine whether negotiation, mediation, arbitration, or litigation is appropriate.

Braden Blumenstiel Legal Advocates Group, LLC represents Ohio businesses and entrepreneurs in contract disputes, including claims involving nonpayment, defective or incomplete performance, missed deadlines, commercial leases, service agreements, sales contracts, partnership disputes, employment agreements, and restrictive covenants. Call 614-508-1677 or 888-343-9796 to discuss your business's legal needs or schedule a confidential consultation.

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