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Three possible remedies for breach of contract

On Behalf of | Jun 10, 2024 | Firm News

When you pay for a service from a specific person or business, the expectation is that they will deliver the work to your exact specifications, as agreed upon. When they fail to do so within the period on the contract, you may be eligible to file for a breach of contract dispute.

What is a breach of contract dispute?

A breach of contract occurs when one party in a binding agreement does not deliver the services specified in the terms of agreement. There are two types of breaches:

  1. A minor breach occurs when the other party does not provide the service by the due date in the contract. For example, an item is due to arrive today but it was delivered two days later.
  2. A material breach happens when on the other party does not deliver the agreed upon item or service. For example, you purchased one hundred pieces of metal spill-proof tumblers from another company but got 100 ceramic mugs instead.

Additionally, a breach of contract may fall under two categories. The first is an actual breach, where one party fails or refuses to perform what specified in the contract to full capacity or an anticipatory breach, where one party will categorically state ahead of time that they will not be delivering what is in the contract.

What remedies are available?

Should a breach of contract occur, you have several remedy options. These can include:

  1. Compensatory damages in contract law. An award of compensatory damages is the most common legal remedy for breach of contract. Compensatory damages are financial penalties the aggrieved party may receive in a contract breach case. The compensation should cover any losses incurred.
  2. Specific performance as a contract remedy, where you can ask the court to require the breaching party to complete their end of the agreement. This may be an option when you feel that monetary damages will not be adequate compensation.
  3. Rescission of contract. This remedy cancels the contract as a remedy for a material breach. This restores the position of both parties prior to entering a contract, and it will be as if an agreement never existed.

The best option depends on the situation. It is wise to take time to review the contract and have a clear understanding of the agreement. This can help you to determine your best course of action in the event of a breach. Major losses may require a more aggressive legal approach.

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