Can You Go to Jail for Breach of Contract? Explained Clearly

Key Takeaways

• Breach of contract is typically a civil matter, not a criminal one, so jail time is highly unlikely.
• Exceptions exist when fraudulent behavior, coercion, or theft is involved.
• Some states allow limited use of writs (like ne exeat) to prevent a defendant from fleeing.
• Damages for breach of contract are generally financial, not punitive or carceral.
• Criminal liability may arise if breach of contract involves overlapping criminal conduct (e.g., fraud, embezzlement).
• UpCounsel connects you with experienced attorneys for nuanced contract disputes.

Can you go to jail for breach of contract? Not likely. While not commonly used, an 1854 Washington statute does allow for the arrest of persons who have breached a contract, it is more common for the party filing the complaint to request relief, meaning the party who breached the contract will cease and desist from causing any additional harm.

Legally speaking, breach of contract is not seen as a crime or even a tort. Additionally, punitive damages are not allowed by most states in contract law when a breach of contract occurs. Making the non-breaching party whole is the only remedy. Jurisdictions that do allow for punitive damages are rare and must be in cases where the punitive damages are against exploitive offenders. And, punitive damages are not guaranteed even in cases where the breach was conducted for malicious and financially destructive reasons.

Washington's Ne Exaet Statute, RCW 7.44

In the rare instance the Washington statute is used, it is not for the arrest and bail of a defendant. Instead, it is a way to prevent the defendant from leaving. Ne exeat means "that he not depart." To use the statute, the plaintiff must apply for a writ. The writ, accompanied by an affidavit, must show that:

• It is believed the defendant plans on leaving the state imminently without completing or making alternate plans to complete the contract terms.
• It is believed the defendant plans on taking property that will be used to defraud the plaintiff.

The statute is not written for the purpose to arrest the defendant. It is instead used as a way for a sheriff to obtain a bond to guarantee the defendant will appear in court at a future date. If the defendant fails to appear or comply, they are then subject to arrest.

While this statute does exist, there is only one divorce case on record that used ne exeat writ in 1908. It is mentioned in conjunction with the Washington Family and Community Property Law in regards to marital assets and child support. However, other legal actions that are more common are used instead including restraining orders, prejudgment attachment, and preliminary injunctions. In the case of breach, while there may be a desire to have the offender arrested, there are better, more fitting, legal actions to use.

When a Breach of Contract Crosses into Criminal Territory

While most contract breaches remain within the realm of civil litigation, certain situations may elevate a breach to criminal conduct. These include:

• Fraud: Knowingly entering into a contract without the intention of fulfilling it can constitute fraud, a criminal offense in many jurisdictions.
• Theft or Embezzlement: Misappropriating funds or assets received under a contract could result in charges beyond breach—particularly theft or embezzlement.
• Coercion or Duress: If one party was forced into a contract through threats or coercion, any actions stemming from that contract may open the door to criminal investigation.
• Falsifying Documents: Altering or forging contract documents can lead to forgery charges, which are criminal in nature.

Even in these scenarios, jail is not guaranteed but becomes a potential outcome based on the nature and severity of the misconduct.

Provisions of California Civil Code Sections 3300 - 3322

In California, the California Civil Code sections 3300 - 3322 include provisions specifically to detail a range of damages when a breach of contract occurs. Some of the sections include:

• Section 3000 - For breach of contract, the compensation will match the approximate amount of damages incurred, unless otherwise directed in the civil code.
• Section 3302 - Damages cannot be awarded if the breach cannot be clearly defined in terms of loss.
• Section 3303 - When an obligation to pay for a breach is listed in the contract, that amount is what needs to be paid.
• Section 3304 - If a breach of contract causes a loss of quiet enjoyment, the damages will be a portion of the property value.
• Section 3306 - If a real estate contract is breached, damages will include the cost incurred when preparing papers, title examination, the difference between the price paid and the price that was agreed to be paid, and the value of the state at the time of the breach.
• Section 3315 - If a carrier fails to accept freight, messages, or passengers, charges can be expected for the carriage and the amount to perform the same service.
• Section 3317 - If a delivery is delayed, the value of expected depreciation of the freight and any depreciation in expected value will need to be paid.
• Section 3320a - Any public works contract for improvement on or after January 1, 1996, is required to pay within 30 days of when a written receipt for payment has been sent. At 45 days, a final notice will be sent.
• Section 3320b - If payment is withheld unjustly, there is a penalty of 1.5 percent of the withheld amount. If any legal action takes place due to nonpayment, the party at fault must pay for the fees associated with their attorney.

Civil Penalties vs. Criminal Consequences in Contract Breaches

It’s important to distinguish between civil penalties and criminal charges when evaluating the consequences of breach of contract. In civil court, the usual outcomes include:

• Compensatory Damages: Intended to place the non-breaching party in the position they would have been in had the breach not occurred.
• Liquidated Damages: Pre-determined amounts agreed upon in the contract.
• Specific Performance: Court order requiring the breaching party to fulfill their contractual obligations.
• Rescission: Canceling the contract and restoring parties to their pre-contract positions.

However, criminal penalties only come into play when separate unlawful behavior (like fraud or theft) is involved. Otherwise, jail is not a risk for a standard breach of contract.

Rare Circumstances Where Jail Is Possible

Although it’s rare, jail time could occur in the following specific scenarios:

1. Contempt of Court: If a court order related to a breach (such as an order to appear, pay damages, or cease conduct) is violated, the court may issue a contempt ruling, which can carry jail time.
2. Repeated Fraudulent Conduct: A pattern of contractual fraud may be prosecuted under criminal statutes.
3. Failure to Pay Child or Spousal Support: While not traditional breach of contract, failure to comply with court-mandated support agreements can lead to incarceration.
4. Use of Ne Exeat in Bad Faith: Though primarily civil, misuse of legal tools meant to prevent flight or fraud could provoke legal scrutiny or even criminal sanctions, depending on the case facts.

These are edge cases—most civil breaches do not involve incarceration.

Key Differences Between Civil and Criminal Legal Systems

To better understand why jail is not typically a consequence of breach of contract, it’s helpful to compare how civil and criminal systems function:

This contrast explains why even serious contract disputes rarely land someone behind bars.

Frequently Asked Questions

1. Can you go to jail for breach of contract in the U.S.?
   Not usually. Breach of contract is a civil matter. Jail may be possible if criminal activity such as fraud is involved.
2. What if someone refuses to pay after breaching a contract?
   The non-breaching party can sue for damages. Jail time may result only if a court order is violated, not simply due to nonpayment.
3. Is breach of contract a felony?
   No. Breach of contract is not classified as a felony unless connected to criminal conduct like fraud or theft.
4. Can you be arrested for not fulfilling a contract?
   No, not typically. Arrest is only possible in extremely rare cases involving contempt of court or criminal wrongdoing.
5. What should I do if I’ve been accused of breach of contract?
   Consult a contract law attorney to assess the claim, your obligations, and possible defenses. You can find qualified attorneys through UpCounsel.

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