How much can you sue for breach of contract
In order to understand how much can you sue for breach of contract in the United States it is important to determine the type of contract you have and whether the contract is in writing and the remedies available based on the type of contract you entered into.
Most states require that certain types of contracts be in writing including contracts for sale of real property (residential or commercial real estate and land), contracts promising to pay someone else’s debt, contracts that takes more than one year to perform, property leases with a duration of over one year, contracts for a fixed amount of money when the amount of the deal is above a certain threshold set by each state and contacts that go beyond the lifetime of the one performing the contracts, and others. Under Florida law, the types of contracts that must be in writing include:
- Contract for marriage
- Contract that cannot be performed in one year
- Contract for conveyance of land and property interest, including leases for one year
- Executor contact
- Surety contract (contract that guarantees the debt of another)
- Contract for the sale of goods of $500 or more except for specially manufactured goods for the buyer.
Contracts are governed by the common law of each state and the Uniform Commercial Code (UCC). Contracts for the sale of goods (tangible, personal property such as bottles, screws, etc.) are governed by UCC Article 2. Common law of each state also applies to sales of goods unless displaced by particular provisions of UCC Article 2.
But how much can you sue for breach of contract? Money damages awarded for breach of contract are intended to compensate the injured party for the breach. To calculate the final amount one must add expectation damages, incidental damages and foreseeable consequential damages together. Liquidated damages are a separate measure of damages. Below, we discuss each measure of damages:
- Expectation damages. These damages are awarded to compensate the injured party by putting him or her in the same financial position had the contract been performed. In the case of contracts for the sale of goods governed by UCC Article 2 there are various rules on how damages are calculated: 1) if the Seller breaches, then the Buyer keeps the goods and sues for fair market value if perfect minus fair market value as delivered or cost of repair; 2) if Seller breaches and Seller has the goods, then Buyer can sue for market price at the time of discovery of the breach of contract minus the contract price or alternative the measure is the value of the reasonable replacement price minus the contract price, whichever is greater; 3) if the Buyer breaches the contract and the Buyer keeps the goods then the Seller can sue for the contract price; 4) if Buyer breaches the contract and the Seller has the goods, then Seller can sue for the contract price minus resale unless the Seller cannot resell in which case the Seller can recover the contract price and in some situations provable lost profits; 5) if the Seller is a volume seller and Buyer breaches the contract than the Seller can sue for provable lost profits.
- Incidental damages. When determining how much can you sue for breach of contract incidental damages must be added to the amount of expectation damages. Incidental damages are costs incurred in dealing with the breach of contract such as costs for storing rejected goods in a sale of goods or finding a replacement in a service contract.
- Consequential damages. When determining how much can you sue for breach of contract, consequential damages must be added to the amount of expectation and incidental damages. The foreseeable consequential damages are limited to damages arising from the injured party’s special circumstances and recovery of consequential damages is limited to situations in which the breaching party had reason to know of these special circumstances at the time of the contract
- Liquidated damages. When damages are too difficult to calculate, the contract can specify a predetermined dollar amount of damages to be recovered in case of breach of contract. These damages are known as liquidated damages and must be specified at the time of entering into the contract and are valid as long as are reasonable and not acting like a penalty.
Contact us, your business attorney in Florida, to help you determine how much can you sue for breach of contract and assist you with you breach of contract claims.