Am Jur 2d - Contracts § 702

VI. Performance or Breach, G. Cause of Action for Breach, 1. Right of Action for Damages, § 702 - Right of action for damages upon breach

All contract duties, and all breaches of those duties, must be enforced pursuant to contract law.[1] If a party to a contract fails to perform a promise, the remedy is an action for breach of contract,[2] and there is no right of the nonbreaching party to unilaterally nullify the contract.[3] A breach of contract suit seeking money damages is an action at law.[4] A breach of contract action presupposes that the contractual relationship is at an end because of a material breach by one party, and damages are sought by the plaintiff as a substitute for performance.[5]

There is disagreement whether injury must be shown as an element of an action for damages for breach of contract. There is authority that the mere breach of an agreement that causes no loss to the plaintiff will not sustain a suit for damages,[7] and that an element of the cause of action is that the plaintiff was damaged by the alleged breach.[8] On the other hand, it has also been said that liability in a breach of contract case does not depend on proof of injury,[9] but is complete when a breach of contract is shown,[10] and, as the law presumes damage from a breach of a contract, at least nominal damages will be awarded.[11] The Restatement supports the latter view, as it provides that the injured party has a right to damages for any breach by a party against whom the contract is enforceable, unless the claim for damages has been suspended or discharged, and if the breach caused no loss or if the amount of the loss is not proved, nominal damages will be awarded.[12] Of course, when it is certain that damages have been caused by a breach of contract, and only the amount is uncertain, there is no reason for refusing to find liability and awarding some damages.[13]

A party in material breach of a contract is precluded from maintaining a breach-of-contract action against the other contracting party.[14]

1   Reighard v. Yates, 2012 UT 45, 285 P.3d 1168 (Utah 2012) .

2   U.S. v. Diaz-Jimenez, 622 F.3d 692 (7th Cir. 2010) ; Commercial Recycling Center, Ltd. v. Hobbs Industries, Inc., 228 P.3d 93 (Alaska 2010) ; Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142 (Colo. 2003) .

3   Commercial Recycling Center, Ltd. v. Hobbs Industries, Inc., 228 P.3d 93 (Alaska 2010) .

4   Henton v. Nokes, 258 Neb. 230, 603 N.W.2d 1 (1999) ; Spagnolia v. Monasky, 2003 ND 65, 660 N.W.2d 223 (N.D. 2003) ; Ahrens v. State, 392 S.C. 340, 709 S.E.2d 54 (2011) .
 As to the measure of damages in a breach-of-contract case, see Am. Jur. 2d, Damages §§ 48 to 136 .

5   Paulucci v. General Dynamics Corp., 842 So. 2d 797 (Fla. 2003) .

6   Solar Applications Engineering, Inc. v. T.A. Operating Corp., 327 S.W.3d 104 (Tex. 2010) .
 As to what constitutes a total breach, see § 706 .

7   Block v. City of West Palm Beach, 112 F.2d 949 (C.C.A. 5th Cir. 1940) .

8   ADR North America, L.L.C. v. Agway, Inc., 303 F.3d 653, 2002 FED App. 0302P (6th Cir. 2002) ; Milan Music, Inc. v. Emmel Communications Booking, Inc., 37 A.D.3d 206, 829 N.Y.S.2d 485 (1st Dep't 2007) ; Eleopulos v. McFarland and Hullinger, LLC, 2006 UT App 352, 145 P.3d 1157 (Utah Ct. App. 2006) .

9   Hydrite Chemical Co. v. Calumet Lubricants Co., 47 F.3d 887, 25 U.C.C. Rep. Serv. 2d 723 (7th Cir. 1995) .
 An action based on a breach of contract will lie even where the plaintiff has suffered no actual damage. RLI Ins. Co. v. MLK Ave. Redevelopment Corp., 925 So. 2d 914 (Ala. 2005) .

10   Hydrite Chemical Co. v. Calumet Lubricants Co., 47 F.3d 887, 25 U.C.C. Rep. Serv. 2d 723 (7th Cir. 1995) .
 A minor breach of contract is compensable in damages. Gary's Implement, Inc. v. Bridgeport Tractor Parts, Inc., 270 Neb. 286, 702 N.W.2d 355 (2005) .

11   Am. Jur. 2d, Damages § 17 .

12   Restatement Second, Contracts § 346 .

13   Randall-Smith, Inc. v. 43rd St. Estates Corp., 17 N.Y.2d 99, 268 N.Y.S.2d 306, 215 N.E.2d 494 (1966) .

14   AAA Const. of Missoula, LLC v. Choice Land Corp., 2011 MT 262, 362 Mont. 264, 264 P.3d 709 (2011) ; LJL Transp., Inc. v. Pilot Air Freight Corp., 599 Pa. 546, 962 A.2d 639 (2009) ; CCD, L.C. v. Millsap, 2005 UT 42, 116 P.3d 366 (Utah 2005) .
 A restrictive clause in an employment contract preventing future competition by an employee could not be enforced where there was a breach by the employer of its own obligations under the contract. Syncom Industries, Inc. v. Wood, 155 N.H. 73, 920 A.2d 1178 (2007) .