Prevention of Performance and Breach of Contract

 A recent Connecticut Supreme Court case (Blumberg Associates Worldwide, Inc. v Brown & Brown of CT)  addressed the prevention doctrine in breach of contract cases.  Under the prevention doctrine if a party to a contract

prevents, hinders, or renders impossible the occurrence of a condition precedent to his or her promise to perform, or to the performance of a return promise, that party is not relieved of the obligation to perform, and may not legally terminate the contract for nonperformance.

In addition, if one party hinders, the other party’s performance will be excused.  The other party will not be permitted to recover damages for breach of contract.  In sum, when one party causes the failure of performance under a contract, the party cannot take advantage of it legally in court. 

The prevention doctrine is part of the application of the implied covenant of good faith and fair dealing that is part of every contract.  Essentially, it is part of an obligation to proceed under a contract in good faith.  The issue in the Blumberg case was whether the prevention doctrine could apply to conduct that occurred before the contract was executed by the parties.  

The court held that it could not.  So, the prevention doctrine only applies if a contract already exists.  The reason is because the duty not to prevent or hinder arises only from implied contractual duties.  Therefore, if there is no contract, there is no duty.

Whether particular conduct constitutes wrongful prevention is decided by a jury or judge.  In Connecticut, prevention can be raised by the attorney in the breach of contract case in defense or prosecution of a claim.