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Contract Law Versus Tort Law

The different types of law are distinct from one another. Each type has its own rules and regulations. For example, contract law often involves business disputes, while tort law deals with negligence and injuries. There are situations, however, where two or more areas of law can intersect.

What Is Contract Law?

Contract law is the body of law that deals with legally binding documents or agreements. A contract between two or more parties could be written or oral and express or implied. Contract law involves the creation of legally enforceable contracts, as well as contract disputes. A legally enforceable contract has an offer, an acceptance of the offer, and an exchange of some form of consideration.

A contract dispute occurs when one of the parties on the contract fails to fulfill their end of the deal. If a manufacturer does not supply a product by the contractual deadline, for example, the manufacturer may face legal action, such as nonpayment by the buyer. In a breach of contract lawsuit, one party sues the other for failing to live up to their obligations, as stated in the contract. This type of claim could result in financial compensation given to the wronged party.

What Is Tort Law?

Tort law is a facet of civil law. A tort refers to wrongdoing. Tort law is based on the legal premise that an individual or entity should be held legally responsible, or liable, for their negligent actions. It deals with the legal theories of negligence and breach of duty. Negligence means a failure to act with a reasonable amount or degree of care, resulting in harm or injury to others. A breach of duty is a violation of one party’s legal or ethical obligations to another party.

If someone is harmed by another person or party’s tort, the victim can file a tort claim in pursuit of financial compensation to be made whole again. Harm can take the form of physical injuries, medical costs, emotional distress, property damage, damage to a business, loss of reputation, financial loss, lost wages, and more.

Examples of tort claims are car accident cases, assault claims, and fraud. A successful tort claim in Arizona could result in financial compensation for the victim’s past and future losses, as well as punitive damages if the defendant was grossly negligent.

Can I File Both Types of Claims at the Same Time?

Yes, contract law and tort law can intersect in certain cases. If a breach of contract harms the other party, for example, the wronged party (plaintiff) could file a claim against the at-fault party (defendant) in pursuit of financial compensation. It is possible to bring a single civil lawsuit with different causes of action for both contract and tort law. The facts of the case, however, must justify the elements of both types of claims:

  • The parties were entered into a valid and legally enforceable contract.
  • One party breached the terms of the contract.
  • The breach of contract caused or contributed to the injury or harm claimed.
  • The plaintiff suffered compensable losses as a result of the breach of contract.

An example where a plaintiff may combine a tort claim and a contract claim is in a product liability lawsuit. In this case, a product that contains a defect, such as a design or manufacturing flaw, may constitute a breach of the manufacturer’s warranty to the consumer. If the defective product injured the purchaser, he or she could bring a claim for both a breach of warranty and under strict product liability. Due to the inherent differences of these two types of cases, however, they are often brought separately.

For more information about contract law versus tort law, consult with an insurance claim lawyer in Phoenix today.