The Andres Lopez Law Firm

Types of remedies for a breach of contract

Whether it is a small business or large corporation, the backbone to any business dealing is a contract. These may seem fairly simple and straightforward; however, when a party to a contract does not uphold their end of the deal, this can create issues. In some cases, a breach of contract does not only invalidate the contract but cause harm to the non-breaching party.

When a breach occurs, the non-breaching party could suffer damages. Depending on the harms suffered, there are different types of remedies to seek in these matters. The most common remedy sought is compensatory damages. This means that the breaching party pays the non-breaching party enough money to get them what was promised of the contract. The next type of remedy is restitution, which is when a breaching party pays the other party back.

It is also possible to seek punitive damages, which are intended to punish the breaching party. Nominal damages are available in matters where there was a breach of the contract but no party to the contract suffered harms. Liquidated damages are available if the parties to the contract agreed to pay in the event of a breach. One could also seek quantum meruit, which awards one party to the contract payment for the work performed prior to the breach.

There are also remedies in equity. These are when the court orders a party to do something. This may also be referred to as an injunctive relief. On remedy in equity is cancellation. This is when the court cancels the contract, allowing the parties to no longer be bound by its terms. Another remedy in equity is specific performance, which is when the court forces the breaching party to do what was promised in the contract whether it is performing a service or delivering goods.

Contract disputes can get complex; however, when one asserts that there is a breach on contract, it is important to understand how to prove this situation. Furthermore, a breach is likely to cause damages, resulting in a proper assessment on the harms caused and how best to make the non-breaching party whole again.

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