Contract vs. Tort Law: What’s the Difference?
When legal disputes arise, deciding how to move forward is critical. This initial planning phase sets the stage for how a judge or jury will ultimately decide the case. The theory of the case will be formed during this time, so it’s imperative to understand the fundamental distinction between contract law and tort law.
In Virginia, the basic elements of a contract are an offer, acceptance, and consideration. Snyder-Falkinham v. Stockburger, 249 Va. 376 (1995). An offer “identifies the bargained for exchange.” Change v. First Colonial Sav. Bank, 242 Va. 388 (1991). Contracts typically require a bargain to exist. Restatement (Second) of Contracts § 17 (1981). Virginia’s Supreme Court has stated that “the major consideration underlying contract law is the protection of bargained for expectations.” Filak v. George, 267 Va. 612 (2004).
A “tort” is most easily understood as a wrong done to another person, whether or not a contractual relationship exists. Black’s Law Dictionary (11th ed. 2019) defines a tort as a civil wrong, other than breach of contract, for which a remedy may be obtained, usually in the form of damages; a breach of a duty that the law imposes on persons who stand in a particular relation to one another.
Tortious conduct is typically one of four types:
- A culpable or intentional act resulting in harm
- An act involving culpable and unlawful conduct causing unintentional harm
- A culpable act of inadvertence involving an unreasonable risk of harm
- A nonculpable act resulting in accidental harm for which, because of the hazards involved, the law imposes strict or absolute liability
In Virginia, torts are most commonly recognized through causes of action like negligence, fraud, misrepresentation, negligent repair, and/or defamation. The number of different torts that exist in Virginia are countless.
It’s critical to not only understand the difference between contract and tort, but even more importantly to understand how to use each theory in your favor. While the proper use of each theory makes a significant impact on the process of a case, damages are really where the rubber meets the road.
I often explain to my clients that the difference between a tort action and a contract action is like the difference between throwing a pebble and a medicine ball into sand. The impact zone and corresponding “splash zone” are significantly different; the pebble creates a small imprint, while the medicine ball makes a larger one. Similarly, a contract claim will typically yield smaller damages than a tort claim.
This is because the damages in a contract action are limited to the “four corners” of the contract — generally, the measure of damages is tied to the value of the agreement. Contrast that with a tort claim, which can include:
- Punitive damages (up to $350,000)
- Personal injury damages
- Emotional distress
- Medical expenses
- Lost wages
The damages from a tort claim can be many times greater than those from a contract claim arising out of the same set of facts.
It’s always important to understand the core fundamentals of the law before deciding whether to pursue an action. Understanding the difference between a tort and a contract claim helps diagnose whether the legal dispute is “worth it.” Of course, other factors come into play, but this is a strong place to begin.
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