Remedies for breach of contract
In the United States generally, remedies for breach of contract vary depending on the type of the breach. The breach can be material or minor (non-material) and the remedies available for breach of contract vary accordingly. This is because the seriousness of the breach can range from minimal to extreme and the remedies for breach of contract are not designed to punish the breaching party but to make good or replace the loss caused by the breach.
Breach of contract is one of the most common causes of civil action in the United States. A breach of contract occurs when one or more parties fails to comply with the provisions of a contract entered into with another company or individual. When a breach of contract occurs various remedies for breach of contract are available to the injured party depending on whether the breach is material or minor. The remedies in a lawsuit for breach of contract are not punitive in nature but instead the remedies awarded are designed to put the injured party in the same position they would be in if not for the breach.
Remedies available for breach of contract under the common law in the United States generally, may include:
• Money damages. The award of money damages refers to monetary compensation that the breaching party has to pay for violating the terms of the agreement and the extent of damages depends on the type of the breach. In cases where there is a total breach of contract, the injured party may recover damages equal to the sum or value that the injured party would have received had the breaching party fully performed the contract, and this includes lost profits. In the case of a partial breach of contract, the injured party usually seeks damages in an amount equal to the cost of hiring someone else to complete the performance provided for in the contract. However, if the portion of the contract that was not performed was small, the courts usually award damages equal to the difference between the value of the contract as performed and the full value of the contract originally agreed by the parties. There are two types of money damages as follows:
o Compensatory damages. Compensatory damages are designed to compensate the injured party for the loss incurred as a result of the breach.
o Punitive damages. Punitive damages are designed to punish the breaching party for the behavior and deter other from committing the same acts.
• Rescission. Rescission is a remedy designed to have the contract set aside by a court and to terminate the contractual duties of both parties. Rescission is usually used in cases where a party is induced to enter into a contract by mistake, fraud, undue influence or duress and the only way to do justice is to terminate the contract.
• Restitution. Restitution is a remedy designed to put the injured party in the position that he or she was in prior to the formation of the contract. The amount awarded as restitution does not include lost profits or other earnings caused by a breach.
• Specific performance. Specific performance is a remedy designed to have the breaching party perform the duties agreed under the contract. Specific performance is a remedy used in cases involving plots of land or valuable items to the injured part.
• Reformation. Reformation is a remedy used by a court to change the contract to correct any inequalities by rewriting the contract.
As you can see from the discussion above, there are a variety of remedies for breach of contract and they are employed differently based on the type of breach. Contact us, your business attorney in Florida, to assist you with remedies for breach of contract.