Is Breach of Contract a Tort? Learn Here

UPDATED as of 5/14/2025 (originally published in May 2022)

The dictionary defines a tort as “a wrongful act or an infringement of a person’s rights other than a breach of contract for which relief may be obtained in the form of damages or an injunction.”

From that definition, it is clear that a breach of contract is not a tort.

However, people sometimes confuse breach of contract and tort, as both entitle the affected party to legal damages.

A breach of contract is “a violation of an agreement’s terms and conditions for which the non-breaching party can sue for damages.”

If the legal definitions still confuse you, the following sections will further explain the difference between these two types of civil law, using practical examples.

Contract Law vs Tort Law

The easiest way to differentiate between a breach of contract and a tort is to remember that contract law governs the drafting and enforcement of agreements between parties, while tort law addresses how individuals who haven’t entered into an agreement must treat each other.

For example, if you’re walking down the street and a speeding driver hits you, they’re liable for compensating you for your injuries.

However, the two of you have never met, meaning you don’t have an agreement regarding compensation for such harm.

In this situation, you’d rely on tort law, a set of default rules that outline how a person injured or who incurs losses due to another person’s (or entity’s) actions or inactions should be compensated.

Tort law also includes legal duties we all owe one another, such as the duty not to harm others through negligent behavior.

To give another example of a tort case: if you run a business, you owe a duty of care to your customers.
If a customer slips and falls on a wet floor in your store or suffers injury from a defective product you sell, they can file a tort claim against you. Again, no contract exists between you outlining the harm, duty, or compensation—tort law steps in.

Tort excludes breach of contract because when you enter into a legally binding agreement, you likely agree on what happens if one or more parties fail to meet their obligations.

You therefore don’t need to use tort laws when seeking damages for a breach of contract.

For instance, if you contract a transportation company to regularly deliver TVs from your warehouse to a distributor and they damage the TV screens during delivery, you can sue them for breach of contract, because they failed to deliver the goods in the condition they received them.

If the dispute goes to court, the court will first examine your business contract to see if it outlines how compensation should be handled in the event of a disagreement.

If your contract is silent on whether the transporter is liable for shipping damages, then tort law, which imposes a duty of care, may be used to resolve the issue.

Other examples of breach of contract include situations where a contracted party fails to complete a job, make timely payments, or performs shoddy work.

Can a Breach of Contract Also Be a Tort?

In law, there is a concept known as concurrent liability, where an individual or organization can be held simultaneously responsible under multiple legal doctrines.

Although contract and tort law are distinct, concurrent liability arises when the same conduct gives rise to both a breach of contract and a tort claim.

This typically occurs when the breaching party’s actions not only violate specific terms of a contract but also breach a duty of care imposed by law—such as through negligence or another tort.

For example, suppose you hire a contractor to install electrical wiring in your home. In an effort to cut costs, they knowingly use dangerously substandard materials, which constitutes a clear breach of the written agreement.

If that defective wiring later causes a fire that injures someone in your household, the contractor’s conduct may also amount to negligence, exposing them to tort liability.

In such cases, the breach of contract allows you to pursue contractual remedies like compensation for repairs or lost use of your property, while the tort claim opens the door to personal injury damages.

What Damages Are Awarded in a Breach of Contract or Tort Claim?

Damages in a tort or breach of contract lawsuit are intended to restore the person who makes the claim to the position they were in before a breach or tort occurred.

For a breach of contract, compensation awarded can include:

• Compensatory damages: These are the most common damages in contract cases and are intended to compensate the non-breaching party for actual losses directly resulting from the breach. This could include lost profits, additional expenses, or the cost of obtaining a replacement service or product.

   

• Liquidated damages are predetermined damages specified in the contract itself, typically used when actual damages would be difficult to measure. Courts will enforce them as long as they are reasonable and not viewed as a penalty.
• Restitution: This type of damage aims to return the non-breaching party to the position they were in before the contract was made. For example, if money was paid in advance for services that were never performed, restitution would involve returning that money.
• Nominal damages: These are small, symbolic awards given when a breach occurred, but no actual financial loss can be proven. They affirm that a legal wrong took place, even if no measurable harm resulted.

To learn more about breach of contract compensation, read our article on “How to Calculate Damages for a Breach of Construction Contract.”

In a tort case, the injured party may be awarded the following:

• Medical expenses: This includes reimbursement for hospital bills, medication, surgeries, therapy, and any future medical costs directly tied to the injury caused by the tortious act.

   

• Lost wages: If the injury caused you to miss work or lose income, you may be entitled to compensation for past and future loss of earnings.
• Pain and suffering: This refers to non-economic damages for the physical pain and emotional distress experienced as a result of the injury. The amount varies depending on the severity and long-term impact of the harm.
• Punitive damages: These are awarded not to compensate the plaintiff, but to punish the defendant for particularly reckless, malicious, or egregious conduct and to deter similar behavior in the future. While rare, they may be awarded in cases involving intentional wrongdoing or gross negligence.

California’s Economic Loss Rule

The economic loss rule prevents a person or business from recovering tort damages when a contract is breached and the only harm is financial losses, including reduced profits, lost revenue, or cost overruns. 

In such cases, the law says the proper legal remedy is a breach of contract claim, not a tort lawsuit.

For example, if a contractor installs defective plumbing and it only causes economic loss (e.g., cost of repair), that’s a breach of contract case. But if the plumbing floods your home and damages your property, a tort claim for negligence might also apply.

The rule exists to stop every failed business deal from turning into a tort case, which could allow people to seek extra damages not available in contract law, like punitive damages or pain and suffering.

By keeping tort and contract law separate, California courts encourage parties to rely on clear, written agreements to manage risk and expectations. 

In Rattagan v. Uber Technologies, Inc. (2024), the California Supreme Court reaffirmed this boundary, ruling that businesses cannot repackage routine contract disputes as tort claims just to pursue larger payouts. The court emphasized that tort law shouldn’t interfere with the agreed-upon terms of a contract.

There is one key exception to the economic loss rule: fraud, which undermines trust and violates basic legal duties that tort law is designed to address. 

If a party intentionally hides or lies about important facts during the contract, the injured party may be able to sue for fraud, even if the loss is only financial. 

But the Supreme Court made it clear that not every dishonest act counts. 

To succeed, the fraud claim must be based on conduct that goes beyond just breaking the contract terms, and the hidden risk must have caused more harm than either side could have reasonably expected when they made the deal. 

If both conditions are met, the economic loss rule does not apply, and the injured party can seek tort damages.

What Is the California Breach of Contract and Tort Statute of Limitations?

In California, the statute of limitations for filing a breach of contract claim depends on whether the contract was written or oral. 

You have two years from the time a contract violation occurs to file a claim against the breaching party if you had an oral contract, and four years if your contract was written.

For a personal injury (tort) case, the time limit is two years from the time the injury happened. If you don’t discover an injury immediately, the deadline for making a tort claim is one year from the date the injury is known.

If your tort case involves a government agency, the statute of limitations window is even shorter: you typically have six months to file an administrative claim. Some exceptions may allow up to one year, depending on the nature of the case.

It is important that you file your breach of contract or tort claim immediately after you suffer losses or are injured because if you make the claim late or after the statute of limitations has lapsed, it is likely that your damages claim will be denied, no matter how strong the case may be.

Gallagher Krich, APC: San Diego Contract & Tort Law Experts

If you find yourself in a situation where you’re considering filing a breach of contract or tort claim, it is essential to consult an experienced attorney. The overlapping rules, statutes of limitations, and potential remedies require strategic legal guidance.

At Gallagher Krich, APC, our attorneys have successfully represented clients across California in both contract and tort disputes, including personal injury cases and high-stakes commercial litigation. With more than 30 years of experience, we bring skill, professionalism, and a results-driven approach to every case.

Call us now at (858) 926-5797 or fill out our online contact form  to schedule a free consultation to discuss your breach of contract or tort case with one of our knowledgeable San Diego, CA lawyers.