Contract disputes can be painful to go through and can also be costly. A contract dispute can result in significant costs and harm for the non-breaching party which is why businesses that are dealing with a breach of contract should be familiar with the remedies that may be available to them for a breach of contract.
Remedies for breach of contract can include several different options depending on the situation and circumstances.
Monetary damages
Monetary damages are generally intended to compensate the non-breaching party for their losses and harm.
- Compensatory damages – compensatory damages are monetary damages that are designed to compensate the non-breaching party for their loss or put them in the situation they would have been in but for the breach.
- Punitive damages – punitive damages are generally considered to be a method of punishing a party for wrongful acts above compensatory damages for the harm caused but are infrequently awarded in a business setting.
- Nominal damages – nominal damages are symbolic damages that may be awarded when a breach has occurred but monetary losses were not proven by the non-breaching party.
- Liquidated damages – liquidated damages are specific damages that are designated in the contract if the contract is breached at some point. A liquidated damages provision should be a reasonable estimate of what the actual damages would be from a contract breach.
Specific performance of the contract
he breaching party to the contract may be ordered to perform under the contract which is referred to as the contract remedy of specific performance. Specific performance is typically a remedy only exercised when compensatory damages are an insufficient remedy.
Cancellation or recission of the contract and restitution
in some circumstances, the contract may be cancelled by the court. If the breaching party has already received some benefit under the contract, the non-breaching party may be able to pursue restitution for that benefit.
Business litigation can be challenging for businesses and individuals alike engaged in business disputes. For that reason, understanding the potential protections can help when a contract dispute pops up.