As a business owner, you know that contracts are vital for doing business. Contracts set out the terms of an agreement between two or more parties and help to avoid disputes down the road. What happens, however, when one of the parties breaches a contract?
Our Pennsylvania business litigation attorneys discuss five common remedies businesses can use when their contract is breached. We will also explain how our team of attorneys at Weisberg Law can help you enforce your contract and get the damages you deserve.
#1. Compensatory Damages
Compensatory damages are the most common damages awarded in breach of contract cases. They are intended to put the non-breaching party in the position they would have been in if the contract had been performed as agreed. For example, if you hire a contractor to build a new wing on your office building, and they breach the contract by failing to complete the work, you would be entitled to compensatory damages for the cost of hiring another contractor to finish the job.
#2. Liquidated Damages
Liquidated damages are damages that are expressly provided for in the contract in the event of a breach. They are intended to provide a certain level of compensation to the non-breaching party and can be either a fixed amount or a formula for calculating damages.
#3. Rescission
Rescission is a remedy that allows the non-breaching party to cancel the contract and be returned to the position they were in before the contract was entered into. This is typically only available if the breach is material or goes to the heart of the agreement.
#4. Specific Performance
Specific performance is a remedy available in some breach of contract cases. It is an order from the court requiring the breaching party to perform their obligations under the contract. This remedy is usually only available if compensatory damages are not adequate to compensate the non-breaching party and if the subject matter of the contract is unique.
#5. Injunction
An injunction is a court order that requires the breaching party to take a specific action or refrain from taking a particular action. It is usually used to remedy a breach of contract case where one party has an ongoing obligation under the contract. The other party is in danger of suffering irreparable harm if the obligations are not met.
Have a Contract that has Been Breached? We Are Here to Help.
Our team of experienced attorneys at Weisberg Law can help you enforce your contract and get the damages you deserve if your contractual rights have been breached. Contact us today for a free consultation. We look forward to helping you resolve your dispute.
Get in touch with our team today at (610) 550-8042to schedule a consultation!
FAQs
If you successfully take someone to court for breach of contract, the most common remedy is compensatory damages.
What are the 5 remedies for breach of contract? ›
5 Common Remedies for a Breach of Contract
- #1. Compensatory Damages. Compensatory damages are the most common damages awarded in breach of contract cases. ...
- #2. Liquidated Damages. ...
- #3. Rescission. ...
- #4. Specific Performance. ...
- #5. Injunction. ...
- Have a Contract that has Been Breached? We Are Here to Help.
If you successfully take someone to court for breach of contract, the most common remedy is compensatory damages.
Which of the following are remedies for breach of contract? ›
For breach of contract cases, there are several different types of monetary compensation remedies:
- Compensatory Damages. This is the most common breach of contract remedy. ...
- Restitution. ...
- Punitive Damages. ...
- Nominal Damages. ...
- Liquidated Damages. ...
- Quantum Meruit.
Damages are inadequate remedy for a breach of contract. Equitable remedies include rescission and restitution, specific performance, reformation.
What are the 5 breaches of contract? ›
- Minor Breach. ...
- Material Breach. ...
- Anticipatory Breach. ...
- Fundamental Breach. ...
- Actual Breach.
Here are five of the most common.
- Compensatory damages. Compensatory damages are a popular breach-of-contract remedy, aiming to cover the loss the injured party suffered due to the breach. ...
- Liquidated damages. ...
- Specific performance. ...
- Punitive damages. ...
- Nominal damages.
You may be sure you have an air-tight case, and you may be right, but a winning breach of contract lawsuit has four factors.
- Factor #1: A Well Written Contract. ...
- Factor #2: A Clear and Obvious Breach. ...
- Factor #3: Substantial and Identifiable Damages. ...
- Factor #4: A Defendant with Deep Pockets.
Because contract law is determined in civil court, not criminal court, the elements must be proven by a preponderance of the evidence. A criminal court requires proof “beyond a reasonable doubt,” while a civil case only requires proof that your claim is more likely to be true than not true.
How to prove damages in breach of contract? ›
Proof of actual harm and its cause must be established. For example: future lost profits are commonly claimed, but how are they proved? If the contract does not specify fixed numbers (either in goods or the dollar-amount of services), then expert witnesses are brought in to testify to the likely amount of damages.
The most common type of remedy in contract law is damages. Damages are typically awarded to compensate the non-breaching party for any losses suffered as a result of the breach.
What is the most common type of damages awarded by a court? ›
Usually, compensatory damages are awarded in civil court cases in order to compensate for damages, injury, or another incurred loss. As we'll explore further in the article, they are different from punitive and treble damages. Compensatory damages can be classified into two types: actual and general.
What are the four types of damages available for breach of contract? ›
- Compensatory Damages. Compensatory damages compensate the non-breaching party for the actual financial losses suffered as a direct result of the breach of contract. ...
- Consequential Damages. ...
- Incidental Damages. ...
- Punitive Damages. ...
- Nominal Damages.
An award of compensatory damages is the most common of the legal remedies for breach of contract. The calculation of compensatory damages is based on the actual losses you have sustained as a result of the breach of contract. They typically fall into two categories: expectation damages and consequential damages.
What are the remedies of actual breach of contract? ›
Remedies for Breach of Contract
- 1] Recession of Contract. When one of the parties to a contract does not fulfil his obligations, then the other party can rescind the contract and refuse the performance of his obligations. ...
- 2] Sue for Damages. ...
- 3] Sue for Specific Performance. ...
- 4] Injunction. ...
- 5] Quantum Meruit.
What are the four types of breach of contract?
- The four main types of breach of contract are as follows:
- Type 1: Minor (or partial) breach of contract.
- Type 2: Material breach of contract.
- Type 3: Fundamental (or actual) breach of contract.
- Type 4: Anticipatory breach of contract.
The hardest part of proving a breach of contract for an oral agreement is proving that the contract existed and was valid. The plaintiff might have to present witness testimony to do so. They could also show evidence in the form of any sort of relevant document such as bills, emails, faxes, or other communications.
How to win a breach of contract case? ›
You may be sure you have an air-tight case, and you may be right, but a winning breach of contract lawsuit has four factors.
- Factor #1: A Well Written Contract. ...
- Factor #2: A Clear and Obvious Breach. ...
- Factor #3: Substantial and Identifiable Damages. ...
- Factor #4: A Defendant with Deep Pockets.
Every case is obviously different but, in general, most parties to a breach of contract action agree that (1) a contract exists, (2) the contract is enforceable and not void, and (3) that they performed under the contract.
