What Are the Potential Remedies for Breach of Contract?
Well-written business contracts are essential to a company’s success. Although business transactions would likely be much simpler if parties could simply be trusted to keep their word, this is unfortunately not how the business world actually works. Entering into major business agreements without a legally binding contract can be disastrous. Business contracts are used to formalize employer-employee relationships, purchase agreements, loans, and for a wide range of other purposes. When a party violates the terms of a valid business contract, the injured party may file a breach of contract claim. There are several remedies to a breach of contract claim that the injured party may be entitled to, depending on the circumstances.
Collecting Damages or Restitution Through a Breach of Contract Claim
The main remedies for breach of contract include monetary damages, restitution, specific performance, rescission, and reformation. Damages refer to the compensation that an injured party may recover through a breach of contract claim. When a contract is completely breached, the injured party, or plaintiff, may receive damages equal to the value he or she would have received if the defendant had honored the contract. If the contract was partially breached, the injured party may be awarded partial damages. Restitution is another remedy that intends to restore the injured party to the condition he or she was in before the contract was signed. Instead of being compensated for lost earnings, the goal of restitution is for money or property that was given to the defendant to be returned to the plaintiff.
Specific Performance, Recession, and Reformation
Another remedy for breach of contract is for the party in violation of the contract to be compelled by the court to fulfill the obligations specified in the contract. This remedy is called specific performance, and it is typically only available when monetary damages would not adequately compensate the plaintiff for the harm caused by the breach. Recession is a breach of contract remedy that terminates both the defendant’s and the plaintiff’s contractual obligations entirely. Another possible remedy, reformation, is for the contract to be rewritten in a way that corrects the injustices that were suffered by the plaintiff.
Contact a Stamford, CT Commercial and Business Law Attorney
Business contracts can be thought of as legally enforceable promises between two or more parties. When a person who enters into a business contract fails to uphold his or her responsibilities, a breach of contract claim may help remedy the harm caused by the breach. To learn more about contracts and the possible remedies when a contract is breached, contact a knowledgeable Greenwich business contract lawyer from the Law Offices of Peter V. Lathouris, LLC. Call us today and schedule a free consultation to discuss all of your business law needs.
Sources:
https://www.investopedia.com/terms/b/breach-of-contract.asp
https://www.thebalancesmb.com/breach-of-contract-398138