E. Remedies
Damages in a breach of contract action are to place the nonbreaching party in the position he or she would have been had there been no breach and the contract was performed.43 The parties to a contract may stipulate an amount of liquidated damages owed in event of a breach, however, if a court finds the stipulation is a penalty, it will not be enforced.44 The proper measure of compensation is the loss actually incurred as the result of the breach.45 Special or consequential damages may be recovered if they either flow as a natural consequence of the breach or have been reasonably within the contemplation of the parties at the time of the contract.46 Lost profits, for example, frequently at issue in breaches of commercial contracts, are recoverable.47
The estimate of lost profits must, however, not be based wholly on speculation and conjecture.48 There must be "a certain standard or fixed method by which the loss may be estimated with a fair degree of accuracy."49 The same standards apply to lost profits sought by new businesses or enterprises.50 Rescission may be granted when there is a breach of contract, but generally, the breach must be so fundamental and substantial that it defeats the purpose of the contract.51 The South Carolina Supreme Court has said that real estate contracts are unique and courts should evaluate their purpose and the materiality of a breach in light of the differences between them and other contracts. Thus, when a buyer withheld $2,000 from a purchase price of $550,000 and the seller alleged that withholding of those proceeds was a material breach, the allegations supported a claim for relief and it was error for the trial court to grant the buyer's motion to dismiss the remedy of rescission. The court acknowledged that the amount withheld was relatively small, but said it was error to focus on the dollar amount withheld because, when proceeds from the purchase price were withheld, the transaction was not final and the purpose of the contract was potentially defeated.52
A court may order specific performance of a contract, a remedy that lies in equity,53 however it should be granted only if there is no adequate remedy at law.54
STATE OF SOUTH CAROLINA COUNTY OF __________
__________ Plaintiff,
vs.
__________ Defendant
IN THE COURT OF COMMON PLEAS
Civil Action No. __________
--------
Notes:
[43] Minter v. GOCT, Inc., 322 S.C. 525, 473 S.E.2d 67 (Ct. App. 1996) (purpose of damages for breach of contract is to put plaintiff in as good a position as he or she would have been if contract had been performed); South Carolina Federal Savings Bank v. Thorton-Crosby Development, Co., 303 S.C. 74, 399 S.E.2d 8 (Ct. App. 1990), aff'd, 310 S.C. 232, 423 S.E.2d 114 (1992) (damages place non-breaching party in position he or she would have enjoyed had contract been performed and give benefit of the bargain); Carolina Winds Owner's Ass'n, Inc. v. Joe Harden Builder, Inc., 297 S.C. 74, 374 S.E.2d 897 (Ct. App. 1988). See also McCall v. IKON, 380 S.C. 649, 670 S.E.2d 695 (Ct. App. 2008) (court could consider receipt of settlement money as factor in determining mitigation and as set-off against total damages). Note, Kennedy v. Columbia Lumber & Mfg. Co., 299 S.C. 335, 384 S.E.2d 730 (1989) (overruling Carolina Winds on economic loss rule issue only).
[44] Baugh v. Columbia...
