Importance of Breach of Contract Remedies in a Lawsuit

As a party to a contracts lawsuit, you can seek several remedies for breach of contract and damages. Sometimes the decision to file a case, or not, could depend on potentially available solutions. Breach of Contract Remedies and Litigation Damages

Also, when filing a lawsuit your complaint has to advise the court about what end-result you expect.

Depending on the facts of your case, there are several options. They include (1) contract damages, (2) specific performance, (3)rescission of the contract, and (4) restitution damages. In many courts, judges tend to award damages only in the event of a material breach.  Seeking the proper remedy is key to any attempt to litigate.

What Are General Remedies for Breach of Contract ?

 When deciding remedies for breach of contract litigation, courts may give a quasi-contractual or restitution remedies where the contract may be unenforceable due to lack of definite or precise terms, or another party was not in compliance with the statute of frauds and one of the parties received a benefit.

  • General breach of contract remedies focuses on the reasonable value of the work performed, and not the amount derived from the defect agreement.
  • When there is a breach, the typical result is monetary damages. This level of breach of contract remedy puts the non-breaching party in a place as if the contract had been performed.
  • Specific performance 
  • Injunctive relief
  • Rescission
  • Reformation of the contract

 Written contracts do not always specifically state the agreement already made between you and the other side. When this happens potential breach of contract remedies could include asking the court to reform (rewrite) the contract to make it conform to what already occurred.

What Types of Contract Damages Can Be Awarded By a Court?

Breach of contract damages can include compensatory or actual damages. This choice of remedies allows the non-breaching party to be placed in a position as if the breach had not occurred.

As the non-breaching party, you can seek general remedies for breach of contract which include damages directly related to the breach. Other forms of remedies include special damages.

  • Courts are very careful when awarding these types of remedies because of speculation. Another name for special damages is consequential damages.
  • The more remote the claim, the more likely that you will not get the award.

Liquidated Damages

Breach of contract remedies for liquidated damages are available when both parties agree in the contract that a certain amount would be paid in the event of a breach.  This is particularly important when litigating breach of construction contracts. 

  • Liquidated damages clauses should be as precise as possible leaving little room for interpretation. For a breach of a construction contract, delays may trigger the liquidated damages clause that provides a monetary remedy for each day that the contract is delayed.
  • The validity of liquidated damages clause: to invoke a liquidated damages remedy in a breach of construction contract action, the amount of breach of contract damages should be ascertainable or easy to compute. Also, the amount should not be excessive.

Compensatory Damages

 A court may award compensatory damages as a remedy for breach of contract to  pay you for damages incurred as a result of the breach.

Punitive DamagesPunitive damages are rarely awarded as breach of contract damages. As a matter of public policy, punitive damages are seen as an ‘eyesore’ under contract law. However, there are circumstances where a statute may provide for such a remedy.

Remember to Mitigate Your Damages To Avoid A Defenses From the Other Party: Breach of contract remedies do not come without a penalty. Litigants make common mistakes because they fail to act to reduce the amount of damages sought. In other words,  breach of contract law does not allow you to sit on the sidelines and let damages increase.

  • You must do something to try to reduce them. 
  • If you have to litigate your case in court, you may be entitled to one or more of the following remedies for breach of contract.

To Minimize Risk, Proceed with Caution in Breach of Contract Litigation: When you contemplate that there is a breach, you should do a careful analysis of the potential for remedies before filing a lawsuit.  This can substantially minimize risk. 

Look for possible affirmative breach of contract defenses that the other side can bring. Note that is a defense is proved, your case might be dismissed.

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