Contract Negotiations in Business Law - Case Study Example

Introduction Breach of contract law discussed with the following case law Augusta Mutual Insurance Company versus Carvie M. Mason, jr., et al The supra mentioned case was filed on February 24, 2005 by Carvie M. Mason, Jr. and Joseph W. Mason against Augusta Mutual Insurance Company (Augusta Mutual) for claiming damages due to the insurance company's wrongful denial of insurance coverage for a loss arising from a fire which damaged their house. This denial for coverage was due to a misrepresentation based on a report known as the "woodburning stove Inspection Report.

" Analysis of Breach of ContractThe insurance company claims that there are two faults in the circuit court's judgment. The first error being that the court had sustained the third-party defendants' pleas with regard to the statute of limitations. The second error that is challenged by the insurance company is the circuit court's judgment affirming the defenses lodged by Jones and Lee-Curtis. The second assignment of error is dispositive. The dispute actually rests on the query as to whether Augusta Mutual's adjusted third-party motion for judgment affirmed unjust claims for fraud in the inducement and/or breach of fiduciary duty.

It may also be that as Jones and Lee-Curtis challenge, which the insurance company tried to change what was in fact a breach of contract claim into actionable tort claims.The principles guiding the trial court's review is based on a judgment sustaining demurrers are well established. "The purpose of a demurrer is to determine whether a motion for judgment states a cause of action upon which the requested relief may be granted." Tronfeld v. Nationwide Mut. Ins. Co., 272 Va. 709, 712, 636 S.E.2d 447, 449 (2006) (citing Welding, Inc. v. Bland County Serv. Auth., 261 Va.

218, 226, 541 S.E.2d 909, 913 (2001)). "A demurrer tests the legal sufficiency of facts alleged in pleadings, not the strength of proof." Glazebrook v. Board of Supervisors, 266 Va. 550, 554, 587 S.E.2d 589, 591 (2003). Actually, in this case Jones when he signed the report he did it intentionally to get a commission for himself and Lee-Curtis and thus he misrepresented material facts upon which Augusta Mutual depended and issued a homeowner's insurance policy to the Masons. The misrepresentation committed by Jones was by virtue of Agency Agreement between Augusta Mutual and Lee-Curtis.

Thus, he is liable for breach of contract.Thus it can be concluded that breach of contract arises when, "The duty to keep a contract . means . that you must pay damages if you do not keep it, - and nothing else." Even though "such a mode of looking at the matter stinks in the nostrils of those who think it advantageous to get as much ethics into the law as they can" (Oliver W. Holmes, Jr, 1897) ConclusionIn the above case it can be stated that if at all any fiduciary duty was alleged to be breached then it was done only because of the contractual relationship that existed between Augusta Mutual and Lee-Curtis, and in turn, its employee, Jones.

Thus as declared in McDevitt, 256 Va. at 560, 507 S.E.2d at 348, the same thing can be said of this case also and that is, "safeguard against turning every breach of contract into an actionable claim for fraud." The circuit court did not err in its judgment, which went against the insurance claim. It had passed the exact judgment, which would put a stop to such breach of contracts on the part of any insurance companies in the future.References1. Oliver W. Holmes, Jr., The Path of the Law, 10 HARV. L. REV.

457, 462 (1897). 2. http://papers.ssrn.com/sol3/papers.cfmabstract_id=868592&rec=1&srcabs=964476 accessed on 23 October 20093. http://www.lawhandbook.sa.gov.au/ch08s02s12.php accessed on 23 October 2009