At Roth Law Group, the bulk of our commercial litigation practice involves actions arising out of business and commercial contracts. Usually, these contracts are in written form, however, oral contracts are likewise enforceable. Both written and oral contracts require the following elements: 1) an offer; 2) acceptance; 3) mutual assent; and 4) consideration. Additionally, the subject matter of the contract must be legal and the parties must be competent to contract – generally meaning 18 years of age and mentally competent. In order to establish breach of contract, a plaintiff must establish: 1) a valid and enforceable contract; 2) performance by the plaintiff; 3) breach by the defendant; and 4) injury arising as a result of defendant’s breach. If you need a Raleigh lawyer for a breach of contract case, we can help.
Sometimes an oral contract that would otherwise be valid pursuant to the above elements may be rendered unenforceable on technical grounds. Many states, including North Carolina, require certain contracts to be in writing pursuant to the Statue of Frauds. The subject matter of these agreements are as follows: 1) Marriage – promises made in consideration for marriage; 2) Year – agreement cannot be completed within one year; 3) Land – sale of transfer of land, leases of more than one year; 4) Executors – promise to pay debts of estate with Executor’s own funds; 5) Goods – sale of goods in excess of $500; and 6) Suretyship – any promise to pay the debts of another. Thus, you can fully perform all of your obligations under a contract only to have your claim dismissed for lack of a writing memorializing the agreement. This is a good reason to strive to get all agreements of any substance in writing in order to satisfy the statute and get the important details of the agreement properly memorialized.
In cases in which neither a written nor oral contract exist, parties may still pursue an action pursuant to legal theories such as unjust enrichment, quantum meruit and promissory estoppel. An example of unjust enrichment would be if you entered into an agreement to have your house painted, but terminated that agreement after the job was only partially complete. You would be unjustly enriched in the event the painter was not compensated for the work he performed, provided it was done satisfactorily. The painter would be allowed to proceed under a theory of quantum meruit, which literally means “as much as he deserves.” In the case of promissory estoppel, consider that you agree to have your house painted for a certain price and that a week later the painter travels two hours to your house with ten of his employees and all of his trucks. If you change your mind and turn him away for no reason, the painter has detrimentally relied upon your promise and he should be reimbursed for his costs.
It is important to understand that there are many defenses to the above causes of action, in the event you find yourself on the defendant’s side. Therefore, a plaintiff should never assume that it will prevail simply by establishing the elements of a particular claim. Those defenses range from breach on the part of the defendant to frustration of purpose.
It’s important to be aware that the statute of limitations (the time in which you may file an action) in North Carolina is generally three years on both written and oral contracts, however, if the contract is for the sale of goods, a four-year limitation applies (and a ten-year limitation applies to actions on sealed instruments).