What Can You Argue in a Breach of Agreement or Contract Case?

Sorting out the hearsay in a Tennessee business lawsuit

Contracts are at the basis of most modern commercial relationships. When you enter into a business agreement, your company is relying on the other party to hold up their end of the bargain. A breach of contract can cause your business significant problems, including financial losses. You may be entitled to recover compensation through a breach of contract claim.

This raises an important question: How do you prove a breach of contract? The short answer is that you generally need to focus on the actual terms of the agreement and the actions (or inactions) of the parties. In this article, you will find an overview of the key things to know about hearsay and breach of contract claims.

What is Hearsay?

In a breach of contract claim, the plaintiff (non-breaching business) must present evidence proving that the defendant actually violated the terms of the agreement. Relevant evidence can come in a wide range of different forms, including:

  • The contract itself;
  • Communications between the parties;
  • Payments/financial receipts; and
  • First-hand testimony of the parties.

You may have heard the term “hearsay” when used to reference evidence. As defined by Black’s Law Dictionary, hearsay is legal testimony “about out of court statements that are involving someone other than the person that is testifying.” Put another way, hearsay is essentially a form of second-hand information. A defendant in a civil lawsuit may object to the introduction of certain evidence on the grounds that it is hearsay information.

Hearsay is Generally Not Admissible—But There are Exceptions

As hearsay is second-hand information, it is strongly disfavored in civil legal proceedings, including breach of contract claims and other business disputes. For the most part, hearsay is not admissible in court. That being said, there are some important exceptions. In fact, under Tennessee Code of Civil Procedure (Rule 803), there are 26 different hearsay exceptions. To be clear, most of them are not applicable to breach of contract claims. Nonetheless, hearsay may be admissible in a breach of contract lawsuit or other business dispute if the document in question qualifies as a valid business record.

Understanding the ‘Business Record’ Exception to Hearsay

Under federal rules of evidence and Tennessee rules of evidence, a business record can be admitted into commercial disputes over an appropriate hearsay objection provided that the record arises out of an otherwise regular conduct activity.

In contract litigation, this exception to hearsay is important: It often allows plaintiffs (the non-breaching business) to get relevant documents and records into evidence that would otherwise not be admissible.

Getting the right evidence into court can be the difference between winning and losing a case. If you have any questions about hearsay and breach of contract claims, an experienced Tennessee business litigation lawyer can provide guidance and support.

For more information on this area, see our overviews of business litigation and contract law.

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