A contract is a mutual exchange of legal promises. For example, you agree to paint my house; and I agree to pay you $500. Each of us has promised to perform. But what if someone fails to perform their promise? That is called a breach.
When a beach occurs, the non-breaching party has options. To illustrate, let’s assume that you failed to paint my house, as agreed.
First, I can receive damages to put me in the same place I would have been if you had performed the contract. In this case, if it cost me $600 to have someone else paint the house, then I would have a claim against you for $100, the extra amount that I had to pay to get the house painted. If I had paid you a deposit, then I would get that amount back too.
Second, in some cases, the damages sought will be a rescission. In this approach both sides are put back in the position they had been before the contract. For instance, you return my deposit and we go our separate ways.
Third, are the rare instances in which specific performance is awarded. In that event, a Court will order you to actually paint my house as agreed.
A few things to remember about contract breaches. The non-breaching party must mitigate damages, which means taking reasonable steps to avoid damages from occurring as a result of the other side’s breach. A material breach permits the non-breaching party to terminate the contract and seek damages without performing the contract to its conclusion. Contract damages do not include punitive damages, or damages for emotional distress or inconvenience.