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Contract Disputes in Tennessee

Contract disputes fall into several different categories.  These are normally (1) commercial contracts between businesses where one business is suing another business; (2) consumer contracts where one party to the transaction is a consumer who is suing a business for breach of warranty, breach of contract, or consumer fraud; (3) breach of contract between individuals which may be written or verbal.

 Written Contracts

If there is a written document, you must look at whether the written document contains all of the agreements between the parties.  Sometimes there are statements which go beyond what is written in the contract document.  There are various contract theories which may bring some of these statements into evidence at a trial, but more often than not, these statements are inadmissible.  These statements are “parol evidence”.  Many written contracts contain language that states the written contract is everything the parties are agreeing to and no other agreements exist. This usually prevents any parol evidence from being presented at trial.

 Verbal Contracts

Under Tennessee law, most of the contracts we see are in writing.  There are some limitations as to topic of the contract, the duration of the contract, and the amount of money involved.  These are part of what is called the Statute of Frauds which is a complex area of law designed to protect people selling goods.

However, there are verbal service contracts which may involve repair of one’s home, repair of an automobile, maintenance of an item, or any type of services.  There are verbal contracts for the sale of goods where one party claims that the goods are defective or damaged.  Many times a person bringing the suit must decide whether to proceed under Tennessee’s contract law, or some other area of law such as misrepresentation.

 Misrepresentation Claims

The most common type of misrepresentation cases which often go hand in hand with contract and warranty claims are negligent misrepresentation.  These include statements by a seller or service provider that are not entirely truthful but do not involve intentionally misleading statements.  Intentional fraud or fraudulent inducement to contract is another type of misrepresentation which can carry with it punitive damages.  Promissory fraud is a promise made without the intent to keep the promise which is yet another cause of action.  Our office sees all sorts of cases involving misrepresentations, both negligent and intentional.  More often than not there is more than one type of claim that can be brought based upon a contract transaction.

 General Considerations

Most people who contact us with contract questions believe the matter is black and white.  In theory, contract litigation should be simple.  In practice, however, nothing could be farther from the truth.  There are peculiar rules of law and statutes that govern what evidence is admissible in a contract action.  These rules differ from any other area of Tennessee law.  It is often the inadmissible evidence that makes the matter appear so clear and easy to decide.

There are often times multiple types of claims or causes of action which will initially be presented in the lawsuit.  Depending upon the facts of the case and the admissible evidence, a party may have to decide on just one of these types of claims prior to submitting the case to a jury.   The number of theories asserted on the front end become fewer as the case moves toward trial or before it is submitted to the jury.  Typically an analysis is done for each theory to see not only which theory is strongest, but also which theory offers the largest recovery.  Some contract statutes such as the Tennessee Consumer Protection furnish treble (triple) damages, all out-of-pocket expenses, plus an award of attorney’s fees. Punitive damages are damages to punish a party for fraud or intentional wrongdoing.  However, a party cannot recover both Consumer Protection damages and punitive damages.  A choice must be made.

Each case must be examined closely for technical defenses on the front end of the case prior to embarking upon a lawsuit with expensive discovery.  Each case must be critically examined on a case by case basis.

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