What remedies are available for a breach of contract?

As a previous post highlighted, a contract dispute could impact normal business operations for companies in Louisiana and elsewhere. When issues emerge with a contract, whether it’s a new contract or a reoccurring one, this could make it difficult to uphold the terms of the agreement. When a party to a contract does not do what the contract outlines, this is often considered a breach. And when a breach occurs, the non-breaching party has options to overcome the situation.

What remedies are available for a breach of contract? While there are various remedies available, some remedies are more appropriate than others given the type and magnitude of the breach. For instance, if the breach is minimal and does not alter the purpose of the contract, it is likely that specific performance will be sought. This means that the goods or service promised by the contract will be fulfilled. However, this type of remedy is usually reserved for goods and services that are unique and no other remedy will suffice.

If there is a material breach and it is no longer possible to meet the terms of the agreement, it is likely the contract will be cancelled. The non-breaching party will then be able to seek damages for the losses incurred by the breach. Often, the non-breaching party will seek compensatory damages. This remedy seeks to put the non-breaching party in the position they were promised to be in if no breach were to occur.

Restitution could be sought if the breaching party was already paid. This form of remedy makes the breaching party pay back the non-breaching party. Additionally, the court could order punitive damages to punish the breaching party, liquidated damages if the contract contained them in the event of a breach or quantum meruit, which awards a party for any work performed before the other party breached the contract.

When there is a breach of contract, this is likely to result in a contract dispute between the parties. While negotiation or mediation could help the parties reach a resolution, if the parties are not able to resolve their issues, it might be necessary to take the matter to litigation. No matter what process parties to a contract chose to go through, it is important to understand that remedies are available when there is a breach of contract.

Source: Smallbusiness.findlaw.com, “What Is the Most Common Legal Remedy for a Breach of Contract?” accessed July 10, 2016