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Defending Your Company From Unfair Competition (Slander/False Accusations)

Your company might find itself the target of unfair competition from business rivals in the form of slander or defamation. These situations are tricky to handle because, particularly in the area of online defamation, it can be hard to prove the identity of who was behind the unethical or illegal conduct. Still, you might have legal options for getting the defamatory content removed and punishing the wrongdoer.

This blog will discuss how to defend your company from unfair competition in the form of slander and false accusations. You will want to work with a South Carolina business attorney if you find yourself in this situation.

How to Prove Defamation of Your Company

Business competitors often bad mouth their rivals, but defamation rises to another level. Defamation can harm the reputation of your company and cause you to lose money. You will have to prove these elements to win a defamation lawsuit:

  • The defendant said or wrote something that was spoken to another person or written in something that got “published.” The publication can be as simple as an online review or comment.
  • The defendant’s words were false.
  • The defendant’s words were not in a category that gets privileged treatment.
  • The defendant’s words caused harm to your company.

You will want to preserve the evidence of the slander or defamation to the best of your ability because the defendant will likely deny the conduct. In the case of online content, you will want to take screenshots and print hard copies of the statements. 

For spoken defamatory statements, you will want to write down as many details as you know, like the date of the statements, the content of what the defendant said, the people to whom the defendant spoke, and any other information you know.

Getting the Defamatory Content Removed

Websites and social media platforms usually allow people to file a request for removal of defamatory content. They might not take action as quickly as you would like, but they could take your request for removal more seriously if your lawyer requests the removal of the false content.

Punishing the Competitor Who Slandered or Defamed Your Company

The challenge of taking action to punish the competitor who is unfairly targeting your business is the relative ease of anonymity online. A competitor can set up a fake profile to use when posting negative reviews about your business. They can get friends or employees to post false content for them. There are even shady organizations that provide “bad reviews” services for hire.

If you can, however, unmask the competitor who has defamed your company, you might be able to sue them for defamation, slander, and unfair or deceptive business practices. Your potential recovery could include fines, actual damages for the economic harm to your company, mental distress, or punitive damages. 

You can talk with a South Carolina business attorney about handling your unfair competition case that involves slander or defamation of your company and the money damages and other legal options you might have in your situation. For help with your case reach out to our office today.

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Understanding an Anticipatory Breach of Contract

You have a contract, and the other party makes it clear that they cannot or will not perform their end of the bargain. You probably wonder what your rights are in this situation and whether you have to perform your obligations under the contract. The blog will help you in understanding an anticipatory breach of contract and what your remedies are when this happens.

Anticipatory breaches of contracts are tricky events. You will want to work with a South Carolina contracts attorney to make sure that your legal rights get protected and that you do not inadvertently make an expensive mistake.

The Definition of an Anticipatory Breach of Contract

Cornell Law School defines anticipatory breach as:

“In contract law, anticipatory breach occurs when a party repudiates prior to the 

date that the performance is due. Anticipatory breach is an excuse for non-performance

by the non-breaching party. A party can retract its anticipatory breach provided that the 

non-breaching party has not relied on it.”

In plain language, if the other side denies that a contract exists or refuses to perform their duties under the contract, they have repudiated the contract, which is a breach of contract. The other side does not have to perform its obligations under the contract unless the breaching party retracts its anticipatory breach before the non-breaching party relies on the repudiation.

Let’s say that you have a contract to buy $50,000 of computers from an office supply company. They notify you that, due to supply chain issues, they will not be able to deliver the computers you ordered from them. You do not have to pay them $50,000. 

You do, however, have to take reasonable measures to minimize, also called mitigate, your damages. Suppose that the contract was for catering services for a large, important event. The caterer you hired notified you three months before the event that they would not be able to provide the catering for the event because they were going out of business. You should make every reasonable effort to find a replacement catering company to minimize your damages.

Remedies for Anticipatory Breach of Contract

There are four possible types of damages available for a breach of contract, depending on the circumstances.

  • Compensatory damages. The purpose of compensatory damages is to pay the non-breaching party money for what they lost because of the breach. These losses are things like the increased amount they had to pay for replacement goods or services. Compensatory damages can get reduced if the judge feels that the non-breaching party did not try hard enough to mitigate their losses.
  • Nominal damages. These damages are for “the principle of the matter.” In other words, you might not have suffered great expense because of the breach, but you want a judge to say that what the breaching party did was wrong. 
  • Liquidated damages. Your contract might state a specific amount that either party will have to pay the other for breach of contract or delays. Often, liquidated damages get stated at a “per diem” rate, like $1,000 per day of delayed performance, up to a maximum total amount.
  • Punitive damages are rare in breach of contract cases because they usually require a showing of actual malice that greatly exceeds the conduct found in ordinary business transactions.

Whether you find yourself needing to back out of a contract or you are on the other side of an anticipatory breach of contract, you will want to talk to a South Carolina business attorney to navigate these complex situations. For help with your case contact our office today, we offer a free consultation.

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Navigating Corporate Governance: A Beginner’s Guide

Solid corporate governance is essential for publicly held corporations to build trust between the companies and their shareholders. Corporate governance policies need to put the priority on the interests of the shareholders. Corporate governance is not one-size-fits-all. Companies need to tailor their compliance in governance programs to their unique circumstances, while realizing that regulations evolve on a continuing basis. The board is at the heart of the corporate governance process. 

Privately held corporations can also benefit from strong governance practices, particularly if they anticipate future investors. Whether your corporation is publicly held or privately held, you would want to work with a South Carolina business organization attorney. This blog will present an overview of navigating corporate governance: a beginner’s guide. 

An Overview of Corporate Governance

Your company will need both management and a governing body to deal with the challenges presented by current market conditions and challenges. The members of your board should keep in mind these primary topics:

  • Strategic planning
  • Compensation of executives
  • Effectiveness and composition of the board
  • Challenges for leadership
  • Risk management 

Periodically refreshing the board with new members can provide a fresh outlook on these issues, increased diversity, different viewpoints, and a lower risk of members becoming entrenched and inefficient. You might want to consider having a formal policy that sets a mandatory tenure or retirement age for board members.

In addition to creating a successful and dynamic board, you will want to engage in succession planning for the leadership of the corporation. Business can continue without interruption if there is a written succession plan for the CEO and other key senior management roles. Profitability and shareholder volume can suffer without these goals being met.

How to Build an Effective and Balanced Board

When you have a board that operates effectively and has the necessary skill sets to explore current and future challenges, your company can grow and prosper. Your board has many jobs, including shaping and guiding the company strategy over the long term. You will want your board to evaluate the company’s strategy on a regular basis, through the lens of competitive threats, developments in the market, and world events.

Additionally, you will want to build a board that addresses these considerations:

  • Tenure of directors. It can be problematic for a director to serve independently on behalf of the corporation if they have a long tenure. There is value to having institutional knowledge, experience, and an understanding of the company’s culture and strategy. The board should try to balance these concepts against the problems they can encounter with excessively long director tenure.
  • Diversity of backgrounds, experience, and age. When you have a board composed of a wide range of candidates across these categories, the board is more likely to engage in lively debate and consider fresh options. It can be tempting for a board to act with one mind, and simply “rubberstamp” measures put in front of it. The more diverse the board members, the less likely groupthink is to occur.
  • Covering necessary skill sets. Depending on the type of industry, your corporate board should include members with specific skill sets, like engineering, accounting, law, and human resources. 

You can talk to a South Carolina business attorney about governance practices that could be valuable to your corporation. Reach out to our office today for help with your case.

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What is a Non-Disclosure Agreement and When Should a Business Use One?

There is a lot of misinformation about non-disclosure agreements, and that confusion can lead to business disputes. The short version is that a person who signed a non-disclosure agreement cannot talk about the information the agreement protects with anyone who is not authorized to discuss the topic. Of course, you need to know more than that about non-disclosure agreements. 

Let’s explore what a non-disclosure is and when a business should use one. A South Carolina business contracts attorney can answer your questions about these documents and draft the right kind of non-disclosure agreement for your company.

An Overview of Non-Disclosure Agreements

Non-disclosure agreements (NDAs) go by several names, for example, they can also bear the title of proprietary information agreements (PIAs), confidentiality agreements (CAs), and confidential disclosure agreements (CDAs). If drafted properly, NDAs are enforceable in court and can protect the information the company wants to keep secret.

Situations In Which Businesses Use NDAs

Companies require entities who are not employees of the business to sign confidentiality agreements to protect the company from the disclosure of private business information in these situations:

  • When a prospective buyer wants information about the business that the general public does not know, the company might require the potential purchaser to sign an NDA.
  • Vendors, suppliers, and prospective investors also might have to sign a confidentiality agreement before getting access to private information about the company.

Many companies routinely require employees to sign confidentiality agreements, particularly if their job duties require the workers to access private information like customer lists, client data, trade secrets, marketing plans, and other topics that could harm the business or benefit competitors if leaked.

Before the advent of non-disclosure agreements, a person could go work for a business, access their confidential information, and then set up a new business in competition with their former employer. NDAs prevent that outcome and provide legal remedies for the employer if a former worker misappropriates protected information.

The company can require new employees to sign confidentiality agreements as a condition of their employment. The company might have to offer existing employees some type of consideration to sign NDAs if they have not signed one for the company in the past.

Enforceability of Confidentiality Agreements

An NDA might not get enforced by the court if the judge determines that the company is using the document to restrict more than they need to or to take away legal remedies of the worker. Here are some examples of NDAs that might be unenforceable:

  • The agreement has an unreasonable duration, like restricting the employee from opening or working for a competing business using similar business processes for 20 years after leaving the company.
  • The geographic scope is too large, for example, banning the worker from engaging in similar work anywhere in the United States, even though the company’s clientele were only located in one city in South Carolina. 
  • Banning the employee from ever discussing anything they learned on the job, no matter how mundane, would be too broad or too restrictive. A department store does not need the same protections as a government intelligence agency, by way of example.
  • Prohibiting the worker from reporting the company for breaking the law or exercising their legal rights if the company engaged in illegal activity against the employee. A business cannot force workers to sign away their right to be free from illegal discrimination or other rights as a condition of employment.

There are many other reasons why an NDA might be unenforceable, which is why you will want to work with a South Carolina business attorney to tailor your non-disclosure agreements to your needs. Reach out to our office today for help with your case.

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Tips for Avoiding Litigation in Business

Getting embroiled in litigation can cause great damage to your company, both in terms of massive legal fees and negative repercussions to the reputation of your business. As Benjamin Franklin said, an ounce of prevention is worth a pound of cure. It is best for your company to avoid getting sued or having to file suit.  

Here are some tips for avoiding litigation in business. You can talk with a South Carolina business attorney about how to implement these strategies in your company.

Be Proactive

Some business owners or managers think they do their job well if they respond to problems promptly. Actually, they would do their job better if they looked for potential problems and fixed them before they happened. This approach is similar to keeping your car well-maintained rather than waiting until you break down at the side of the road.

Listen to feedback and suggestions from your employees and customers. The compliments can be useful to analyze what your company is doing right so that you can try to replicate that behavior in other areas of your business. Complaints give you an opportunity to fix small problems before they develop into significant issues that could lead to litigation.

Return to the “Customer First” Model

In the past, many businesses operated under the principle of “the customer is always right.” Of course, the customer was not always right, but business owners would bend over backward to meet the expectations, however unreasonable, of the customer base. When the company made an honest mistake, it would go to great lengths to make it right.  

This approach avoided litigation and generated fantastic word-of-mouth benefits because the business got a reputation for treating its customers like gold. Going the extra mile might cost a little more initially, but the money it saves in preventing lawsuits and the money it makes for your company when it has an excellent reputation will be worth the expense. People do not tend to sue companies that treat them well.

Hire Carefully

If you make the mistake of hiring a difficult or litigious person to work for your company, it can be challenging to terminate the person’s employment without facing a lawsuit. You will want to perform a thorough background check before extending an offer of employment. You might not receive useful information from prior employers if they are concerned about getting sued by the job candidate. 

If you have legitimate concerns, think twice about hiring the individual. Always use a probationary period with new employees. Have the individual sign a document that gives you the right to terminate the employment during or at the end of the probationary period with or without cause. 

Use Alternative Dispute Resolution Methods

Mediation or arbitration can be useful ways of resolving disputes. These methods can be less expensive than full-blown litigation. Also, alternative dispute resolution can preserve the working relationship with the employee, vendor, or customer. 

Another option is to have a South Carolina business attorney negotiate a settlement of the claim against your company. You might be able to use any of these three methods to de-escalate the dispute and resolve the conflict amicably. Contact our office today for help with your case.

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Penalties for Breach of Fiduciary Duty

Breach of fiduciary duty is an increasingly common accusation raised among people in business when they have disputes with their partners, managers, and employees. Usually, the penalties for breach of fiduciary duty are financial, since violations of a fiduciary duty often cause economic losses.

If you suspect that someone has breached their fiduciary duty, you will want to talk to a South Carolina business attorney about your options. These situations are not one-size-fits-all. The appropriate remedy in one dispute might be quite different from the outcome in another.

An Overview of Fiduciary Duty

A person has a fiduciary duty when they have a responsibility to put the interests of another individual or business ahead of their own interests. For example, business partners have a duty to take actions that are in the interests of the partnership and their partners. If one partner acts in a way that benefits the partner at the expense of the other partners or the partnership, the partner has breached their fiduciary duty.

What Can Constitute Breach of Fiduciary Duty

Breaches of fiduciary duty typically vary based on the role of the violating party. In other words, partners tend to perform different actions than employees or members of the board of directors when they violate their fiduciary duties.

Here are a few examples of conduct that can constitute a breach of fiduciary duty:

Partners

A partner might take company funds or assets for their personal use. The partner might commit actual embezzlement or merely mismanage partnership accounts. Partners also need to disclose conflicts of interest and refrain from engaging in self-dealing like funneling contracts away from the partnership to their personal business entity. 

When a partner is negligent or takes illegal actions, the partner could breach the fiduciary duty to the partnership by damaging the company goodwill and exposing the partnership to liability. 

Board of Directors 

Members of the Board of Directors face some of the same opportunities for breaching their fiduciary duties as a business partner, like conflicts of interest and self-dealing. In addition, the board of directors might violate shareholder agreements about voting rights, payment of dividends, and access to records.

Employees and Agents

When someone acts on behalf of someone else as their agent or employee, they have a fiduciary duty not to use the relationship to harm the principal or employer. Common types of fiduciary breaches include theft, embezzlement, colluding with a competitor, filing fraudulent invoices or expense reports, or sharing the employer’s customer lists and trade secrets.

The Importance of the Partnership Agreement, Employment Contract, and Bylaws

The partnership agreement, employment contract, bylaws, or other applicable document might address the issue of what penalties are available in the event of a breach of fiduciary duty. You will need to look to these documents first when exploring your options against the person who violated their fiduciary duty. 

Taking Legal Action for Claims of Breach of Fiduciary Duty

Breach of fiduciary duty is typically a common law issue, meaning that there is an absence of specific criminal statutes that create a specific offense called breach of fiduciary duty. Instead, the person violating the fiduciary duty could face criminal charges or a civil lawsuit for fraud, embezzlement, theft, or other conduct. 

The criminal penalties would depend on the offense charged. Civil penalties usually bear some relationship to the financial harm caused by the breach of fiduciary duty. 

A South Carolina business attorney could talk to you and help you seek to recover the economic harm that you or your business entity suffered as a result of the breach of fiduciary duty. Contact our office today for help with your case, we gladly offer a free consultation.

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Dissolving an LLC in South Carolina – Watch Out for These Four Things

It is relatively easy to set up a limited liability company (LLC) in South Carolina. After an LLC has served its purpose, or if you created an LLC for a start-up that never materialized, you might wish to dissolve the LLC.

A South Carolina business attorney can provide legal advice on the steps you need to take. When dissolving an LLC in South Carolina, watch out for these 4 things. 

Doing Nothing

One of the worst ways to dissolve an LLC in South Carolina is to do nothing and hope that the business entity will simply fade away on its own. Failing to fulfill your legal obligations of filing reports, preparing tax documents, sending collected sales tax to the appropriate authorities, or other missteps could land you in hot water. 

Dissolving an LLC Is Different from Winding up the Business

Dissolving an LLC in the state of South Carolina means that you go through a formal process called “dissolution” in which you end the legal existence of the business entity. Voluntarily dissolving an LLC of which you are a member is preferable to a court ordering an involuntary dissolution or having the state issue an involuntary administrative dissolution because the LLC did not fulfill legal obligations like paying taxes.

When you complete a voluntary dissolution, your personal assets can be protected from creditors of the LLC. You might not have any such protection with an involuntary dissolution.

The operating agreement of the LLC will probably provide guidance on how to dissolve the company. You will want to make sure that you not only follow all procedural dissolution requirements contained in the operating agreement, but that you also create proof that you did so, like calling a formal meeting, providing proper notice of the meeting and the purpose for the meeting, and recording the decision of the LLC members at that meeting. 

Winding up the business of the LLC involves paying valid debts, creditors including LLC members, and all outstanding taxes. After completing these payments, the LLC can then distribute its assets. South Carolina has an LLC Act that requires the payment of debts, creditors, and taxes before the distribution of assets.

Notice of the Dissolution

Because winding up the business requires you to pay debts and creditors, it would be smart to give notice to those individuals and organizations that the LLC is dissolving. Although South Carolina does not require the step, doing so can reduce your liability. Also, you can have greater peace of mind when distributing assets if you know that there are unlikely to be claims on those assets in the future. A best practice is to send written notice directly to known claimants and to publish notice of the dissolution in the appropriate legal newspaper.

Filings with the Secretary of State

South Carolina does not require people to file articles of termination of LLCs, but doing so can provide you protection in a number of scenarios. For example, if someone decides to “hijack” your company identity and do business in your LLC’s name, having articles of termination filed with the Secretary of State can shield you from liability. 

A South Carolina business attorney can help you comply with state requirements and take the additional steps that can protect you as a member of a dissolving LLC. For legal help with your case get in touch with our office today, we offer a free consultation.

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What is a UCC filing?

The Uniform Commercial Code (UCC) governs commercial transactions between a debtor and a secured party. It is not federal law. Instead, it is uniform laws adopted at the state level. S. C. Code of Laws Title 36, Article 9 contains the laws adopted in South Carolina. 

A UCC filing is a security instrument used by lenders. It creates a lien on a borrower’s assets. The collateral may be one item or a group of items. Lenders file UCC Financing Statements (UCC-1) to notify other parties that the lender has a security interest in the property described in the UCC filing. 

Many types of assets can secure a UCC filing. According to our South Carolina corporate lawyers, assets that might be pledged as collateral using a UCC filing include:

  • Inventory
  • Real estate fixtures
  • Letters of credit
  • Accounts receivable
  • Household furnishings
  • Office equipment and fixtures
  • Heavy machines and commercial equipment
  • Operating equipment 
  • Investment securities
  • Vehicles
  • Bank or trade accounts
  • Other tangible assets used or owned by a business

A UCC filing does not impact the operations of a business unless it wants to borrow additional funds. Lenders may not want to “get in line” behind another creditor who holds the first position for secured collateral. 

A UCC statement may create a lien on a specific asset. However, a “blanket UCC” creates a security interest in all of a company’s assets. As a result, a blanket UCC statement could make it much more difficult for a company to obtain additional loans and lines of credit until the UCC is canceled, satisfied, or expires. 

UCC statements are valid for five years. However, filing a UCC-3 statement extends the UCC filing for an additional five years. 

Where Are UCC Statements Filed in South Carolina?

UCC filings may be filed against a business or a person. The Secretary of State’s Office handles UCC filings throughout the state. Filings may be submitted online, by mail, or in person. In addition, the public may search the UCC filings through the Secretary of State’s Office. 

Some UCC statements should be filed with the Secretary of State and the county offices. The county of filing would be the county of residence for the debtor or the county where the secured property is located. 

The types of UCC filings that should be filed with both the state and county offices include:

  • Tax liens
  • Real estate fixtures
  • Mineral rights
  • Timber 

Failing to file your UCC statement with the correct government office could make the UCC unenforceable. 

UCC statements are a “first come, first secured” lien. In other words, the lender who files the first UCC statement holds priority for the secured collateral. Therefore, it is essential to submit a correctly completed UCC statement to the required office as soon as possible after the debt is created.

Contact Our South Carolina Business Attorney for More Information 

You do not need a lawyer to prepare and file a UCC statement. However, seeking legal counsel from an experienced South Carolina Business lawyer can ensure the UCC is prepared and filed correctly. Mistakes could make the UCC filing unenforceable, which limits your options for collecting a bad debt. Get in touch with our office today for a free consultation.

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How to Proceed if my Business is Being Sued for Business Malpractice

Malpractice claims can be devastating for a business. Claims of malpractice allege that a professional failed to execute their duty of care to a client. It calls into question your business ethics, judgment, and qualifications. Business malpractice lawsuits can also create substantial liability for your business. When you receive a lawsuit alleging business malpractice, the first call you should make is to a South Carolina business attorney.

What Should You Do When Your Business Is Sued for Business Malpractice?

Take the complaint and the allegations of business malpractice seriously. You need to act immediately to protect your business and minimize any damage to your company. The steps you should take when being sued for business malpractice include:

Contact Your Business Attorney Immediately

Call your lawyers to let them know you received a lawsuit alleging business malpractice. They will need a copy of the lawsuit to begin reviewing the allegations, investigating the claims, and gathering information to file an answer to the lawsuit before the filing deadline expires for a response.

Notify Your Malpractice Insurance Carrier

Notify your malpractice insurance carrier and forward a copy of the complaint to the insurance company. If you have insurance coverage for the allegations made in the complaint, your insurance provider should hire an attorney to represent your company by defending the lawsuit. If so, you might not need to hire a business attorney. However, if there is a chance that the malpractice insurance does not cover the allegations or you could be personally liable for damages, it is best to consult legal counsel.

Do Not Contact the Plaintiff or Try to Represent Yourself

The plaintiff has a lawyer. You should not try to contact the plaintiff directly. In fact, you should not contact the lawyer for the plaintiff. Let your attorneys handle all communications and responses to the allegations in the complaint. Also, do not try to represent yourself or your company in a business malpractice lawsuit. Regardless of your knowledge or experience, representing your business in a legal matter is never wise.

Gather Evidence and Information 

Begin gathering evidence and information relevant to the allegations in the lawsuit. Make copies of contracts, agreements, and other documents. Create a witness list for your attorney, including a short narrative explaining each witness’s information related to the lawsuit. Preserve all records related to the case, including emails, text messages, and paper documents. If specific employees have information relevant to the case, instruct them to preserve all information and not to discuss the case with anyone.

Refer All Questions About the Case to Your Lawyer

If anyone inquires about the case, refer them to your attorney. Do not even state “not comment.” Just provide them with your lawyer’s name and contact number. You should not discuss the lawsuit with anyone other than your lawyer.

Contact Our South Carolina Business Attorney for More Information

Allegations of business malpractice can be costly and damaging to your company’s reputation. Contact our office to discuss your situation with an experienced South Carolina business attorney.

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Is Non-Performance Permitted? The Impact of Coronavirus on Contracts

Life as we knew it came to a screeching halt in 2020 when the COVID-19 pandemic hit. Even in previous global events like World War I and World War II, the events did not impact the health and economy of every nation worldwide at the same time. People were able to go to work in many cities without disruption, and supply chain issues were generally regional and temporary.

Thanks to COVID, many businesses had to shut their doors for weeks or months on end due to governmental orders. Business owners did not know when they could do their trade again, or what restrictions they would face. You might have been unable to get the essential materials you needed to perform your contracts or have enough workers to get the job done. A South Carolina business attorney can help you navigate the consequences of those events and answer the question, Is non-performance permitted? The impact of coronavirus on Contracts.

How to Determine Your Rights and Duties Under a Contract

There is no automatic result if you or another party could not perform under a contract during the COVID-19 pandemic. General principles of South Carolina will guide the interpretation of each party’s contractual rights and obligations, but you have to read each contract carefully and analyze its terms. You might have defenses if the contract contains certain terms, but have to look to other legal principles under common law if your agreement is silent on those items.

Force Majeure

If both parties to a contract wanted to perform their obligations but could not, through no fault of their own, because an “act of God” interfered, that is a “force majeure” situation. To qualify as a “force majeure,” the event must be:

  • Out of the control of the parties to the contract. Neither of you caused or contributed to the problem. The COVID-19 pandemic was not the fault of business owners in South Carolina.
  • Significant. An event like the COVID-19 pandemic shut down the economy for months, unlike a thunderstorm that might cause a brief interference with normal activity.

You will need to read the contract and see if the document contains a force majeure provision. Usually, a force majeure provision allows temporary delays in performance but does not cancel the contract or the obligations under the contract. The terms of the contract will control.

Impossibility

If the COVID-19 pandemic made it impossible for you to perform your duties under the contract, the doctrine of impossibility might be a successful defense for non-performance. For example, you had a contract to manufacture and supply 10,000 units of plumbing parts a month to a hardware store. 

The government forced you to close your manufacturing facility during the mandated lockdown, making it impossible for you to manufacture the parts required by the contract. No matter how much you wanted to keep working and making the parts, you could not do so. 

Frustration of Purpose

If an event happened that was not anticipated when you entered into the contract, and that occurrence substantially frustrated you from performing your duties under the contract, you might argue the frustration of purpose defense for your non-performance. An example of this defense is if you experienced repeated supply chain problems in getting the materials you needed to perform your contractual duties or could not maintain a sufficient workforce to get the job done due to the pandemic.

The economic fallout from the COVID-19 pandemic has not yet ended, and the business community is struggling to resolve the consequences of contractual non-performance. A South Carolina business attorney can help you address these issues. For legal help contact our office today, we offer a free consultation.