Legal Memorandum: Essential Elements of Breach of Contract

Issue: In Alabama, What are the Elements Necessary to a Breach of Contract Action?

Alabama follows the principle that, generally, the court should apply the substantive law of the state in which the agreement was made.  See Chazen v. Parton, 739 So. 2d 1104, 1107 (Ala. 1999).  Under Alabama law to establish that a breach of contract has occurred a plaintiff must prove four elements: (1) the existence of a valid contract; (2) its own performance under the contract; (3) the defendant’s nonperformance; and (4) damages.  Employees’ Benefit Ass’n v. Grissett, 732 So. 2d 968, 975 (Ala. 1998).

With respect to a plaintiff’s own performance and the defendant’s nonperformance where, as here, the contract is executory, the plaintiff is excused from performance when the defendant repudiates the agreement.  See Shirley v. Lin, 548 So. 2d 1329, 1334 (Ala. 1989) (“Once a party repudiates the agreement the other party is excused from further performance.”); Hanby v. Campbell, 222 Ala. 420, 132 So. 893, 894 (1931) (in breach of contract action where the promises are mutual and dependent, a plaintiff must show performance or an offer to perform unless the defendant repudiates the contract).  “Repudiation” consists of words or acts evincing an intention to refuse performance within the future time allowed by the contract.  Draughon’s Business College v. Battles, 35 Ala. App. 587, 50 So. 2d 788, 790 (1951).

The only element necessary to discuss further is the first element—the existence of a valid contract.  To the […]