On February 6, 2018, the New York Times published a news article titled “FEMA Contract Called for 30 Million Meals for Puerto Ricans, 50,000 Were Delivered.” In the wake of Hurricane Maria, 30 million self-heating meals needed to be delivered. FEMA awarded Tiffany Brown, an entrepreneur in Georgia, the job. When only 50,000 meals had been delivered, when 18.5 million were due, FEMA terminated the contract.
Breach of contract disputes like this one arise all the time in New York, and any breach of contract suit must be filed within 6 years of the breach. When businesses enter into contractual agreements, it is understood that both parties agree to the terms outlined in the document; however, the agreed upon terms aren’t always met, leaving one party at a loss.
The elements of a breach of contract dispute are as follows:
- Existence of a contract
- Performance by the party seeking recovery
- Non-performance by the other party
- Damages as a result of the breach
However, depending on what the contract is for, different laws will apply. For example, when the contract is for services, the common law applies. When the contract is between merchants and for the sale of goods, the rules of the Uniform Commercial Code (UCC) apply.
In New York, under either the common law or the UCC, the breach must be “material” and go to the core of the agreement in order to recover damages. For example, the delivery of a certain number of self-heating meals was material to the contract between FEMA and Tiffany Brown. The failure to perform would be a breach of contract.
Remedies for breach of contract disputes include money damages intended to make the non-breaching party whole and include both consequential and direct damages. Direct damages are the difference between the value received and the value that should have been received had the contract been performed. Consequential damages include lost profits and any resulting damages that can be traced back to the breach. Other remedies include specific performance, liquidated damages, restitution and rescission of the contract.
As there are two sets of laws that may apply (common law and UCC) as well as many exceptions to breach of contract laws, it is important to find an experienced attorney you can trust to handle your case. Contact the attorneys at Spiegel, Brown and Fichera, LLP.