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What are the remedies and damages for breach of contract?

Entering into a contract for any type of reason is risky for both parties. You might enter into a contract for real estate. Or, maybe the contract has to do with your business. Either way, you need to understand what's at stake and how you can protect yourself should one party breach the terms of the contract. So, what are the remedies and damages available for breach of contract?

According to the law, the remedies for breach of contract include damages, a specific performance and the cancellation of the contract with restitution paid by the breaching party.

Damages come in four ways: compensatory, punitive, nominal and liquidated. The type of damages you are awarded by the court in a breach of contract case depends on the extent of the breach and how much money the non-breaching party lost when the contract was breached.

When the court orders specific performance, that means the breaching party must perform whatever they agreed to when they signed the contract. This is most often awarded when financial damages cannot be awarded in the case.

The contract can legally be canceled if the non-breaching party so chooses once the breach has occurred. At this point, the breaching party will then have to pay restitution to the non-breaching party for the money they already spent related to the contract.

Breach of contract can put a damper on your real estate deal, your business or anything else you are doing in the business world. Make sure you understand how much you can lose and how you can protect your rights when the other party breaches your contractual agreement.

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