What are the remedies for breach of contract?

What are the remedies for breach of contract?

On Behalf of | Nov 9, 2018 | Uncategorized |

Without legally enforceable agreements, the Louisiana business world would collapse. Businesses would not be able to rely on supply to meet demand, and suppliers would not be able to rely on consistent purchases and purchase prices to ensure their viability. Fortunately, strongly drafted contracts are legally enforceable, which means that, when adequately created, these documents can set expectations and protect all parties involved in the event that one side does not live up to their obligations. When a party fails to adhere to the terms of a contract, then a breach has occurred.

There are three types of remedies for a breach of contract. The first is damages. Here, a wronged party files a lawsuit in hopes of recovering compensation for the harm caused. Compensatory damages seek to put the party in the position it would have been in if the breach had not occurred, and punitive damages, which are rare, seek to punish a breaching party. A contract may also spell out damages to be paid in the event of breach. These are referred to as liquidated damages.

The second remedy available after breach is specific performance. This typically applies to contractual obligations that are unique in some way. For example, if art work is commissioned but an artist fails to create the art that was paid for, then a court may order the artist to perform the act of creating the agreed upon artwork.

The last remedy type is cancellation and restitution. This remedy cancels the contract and forces the breaching party to return the wronged party to the position it was in prior to entering the contract. Again, this often involves the paying of compensation.

Breach of contract issues can be quite difficult to handle. There are often conflicting stories, depending on which side is speaking, which can make it difficult for a court to determine which side to favor. This is why it is often imperative to seek strong legal counsel before approaching a breach case. A competent business attorney may be able to develop a legal strategy that results in a favorable resolution.