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Remedies for Breach of Contract

contract-breachIf another party fails to honor the terms of an agreement — known as breach of contract — you may choose to negotiate, attempt to enforce the contract, or seek damages for harm the breach has caused to you or your business.

When a case is litigated, the court may apply any of several types of remedies for breach of contract.

Compensatory Damages

The primary legal remedy for breach of contract is damages, or financial compensation.

The court may choose to award compensatory damages to reimburse you for losses you suffered that directly resulted from the breach of contract. With the compensatory damages, you should be financially made whole as you were prior to the breach.

Two types of compensatory damages exist. General damages directly reimburse you for the loss and are the most common category of damages in breach of contract cases.

Special or “consequential” damages reimburse you for harm caused by the breach of contract due to potentially unpredictable circumstances. To receive an award of special damages, your attorney will need to demonstrate that the party that breached the contract understood the special conditions that could cause the loss.

Punitive Damages

Courts award punitive damages to punish at-fault parties and, in some cases, to hold them up as examples to others who might act in a similar manner. Such damages are awarded when a party breaches a contract in a way that is fraudulent or malicious. While compensatory damages reimburse the harmed party for the actual financial loss, punitive damages are awarded additionally as punishment to the offending party.

Additional Damages

In cases in which a breach of contract occurred but the plaintiff did not suffer actual harm, the court may award nominal damages.

The court also may award damages known as “quantum meruit,” or the value of work performed prior to the other party breaching the contract. For instance, if a painter has completed half of a building before the building owner decides not to pay, the painter may ask for quantum meruit to cover the completed work.

Other Types of Remedies

Courts may choose to invoke several other types of remedies in breach of contract cases.

Under cancellation, the court nullifies the contract and rules that the involved parties no longer must abide by the terms of the original agreement.

Courts use specific performance to compel the party that breached the contract to deliver the items or complete the service agreed to in the original contract. Specific performance may be invoked in cases in which the pledged services or merchandise cannot be replaced or provided by another party.

Work With an Experienced Contracts Attorney

Contracts are critical to the successful operation of your business and must be negotiated, written and executed properly. A breach of contract by another party can cause serious harm to your business, including loss of revenue, wasted time, and damage to your corporate reputation.

By working with experienced contract attorneys, you can seek all legal remedies available to you when breach of contract occurs.

The attorneys at Gertler Law Group, LLC, have extensive experience with enforcing contracts across many industries and can assist you if another party fails to provide contracted services or goods, fails to pay as your agreement stipulates, or stands in the way of your ability to complete a contract. For a consultation, please contact us.