Louisiana businesses, whether they are small mom-and-pop operations or large corporations, depend on contracts as part of doing business. Unfortunately, even the most ironclad contract can still be breached. When one party to the contract fails to fulfill its obligations, the other party may be entitled to damages.
For example, the wronged party may be entitled to compensatory damages. These damages are meant to place the wronged party in the same place they would be if the contract had been followed. Another type of damages are punitive damages.
Punitive damages are awarded in an amount that is greater than that which the breaching party would be responsible for under the contract. The additional damages are put into place as a means of punishment for breaching the contract. But, an award of punitive damages in a breach of contract case is not common.
A third type of damages are nominal damages. These may be awarded if, technically, the contract was broken; however, the wronged party did not really suffer any monetary loss. Finally, there are liquidated damages.
Liquidated damages are included in the language of the contract itself. This language states what the damages will be if the contract is breached. When including a liquidated damages clause in a business contract, the amount agreed upon must be reasonably close to what the actual damages would be.
These are only a few types of damages that may be sought, if a business contract is breached. Other remedies may be available as well, such as specific performance, cancellation or restitution. In the end, if a business owner has lost out due to a breach of contract, he or she may want to consult with an attorney, who can assess the situation to determine what remedies to pursue.
Source: FindLaw.com, “Breach of Contract and Lawsuits,” accessed on April 30, 2017