When a contract is breached, it may mean more than a headache for the non-breaching party. For that reason, it is important for the party harmed by a contract breach to know what types of damages may be available to them through a breach of contract claim against the breaching party.
There are generally three categories of contract damages that are intended to compensate nonbreaching parties for the harm they have suffered as a result of the breach. Damages can include compensatory, or monetary, damages, specific performance or recission of the contract and restitution.
Compensatory damages are generally monetary damages that are intended to compensate the non-breaching party for the damage done by the breach to put them in the position they would have been in without the breach. Punitive, nominal and liquidated damages are other types of monetary damages that may apply in limited circumstances for a breach.
Specific performance is a remedy for a contract dispute that entails the court ordering the breaching party to perform their obligations under the contract.
Recission and restitution
Recission of the contract refers to cancellation of the contract which may accompany a court order for restitution. If the breaching party has already obtained some benefit of the contract due to the non-breaching party’s performance of their obligations under the contract, the court may order the breaching party to repay restitution for the value they have received under the contract.
Contract remedies are designed to protect non-breaching parties who find themselves in a contract dispute. For that reason, those harmed by a contract breach should be familiar with the legal resources and remedies that may help them.