Litigation: Remedies For A Breach Of Contract

What are the remedies for a breach of contract?

When a breach of contract occurs between people or businesses, a court can order the party that breached the contract to pay or perform a remedy.

These remedies for a breach of contract include damages, specific performance, and cancellation and restitution.

There are 4 different types of monetary damages:

Liquidated damages: This type of damages occurs when the parties who formed the contract wrote in the contract what the compensation would be in the event that a specific breach occurred.

Compensatory damages: The goal of this type of damages is to put the party that did not breach the contract in the position that the breach never occurred.

Punitive damages: This type of damages is rarely awarded in court for breaches of business contracts. The goal of this type of damages is to punish the breaching party by making them pay the non-breaching party more than what would adequately compensate them for the breach.

Nominal damages: The goal of this type of damages is to award the non-breaching party a win, but since no actual financial loss took place, the non-breaching party is typically awarded only $1 in damages.

Specific performance

This is an alternative to an award of damages. The goal of damages in general is to award money to the non-breaching party so that they can return to their position prior to the breach of contract, however, in certain cases, damages will not return them to that position. Instead, they may ask a court to order the breaching party to perform the specific duty that was in the contract. The breaching party has an obligation to try to mitigate damages by all reasonable means.


Non-breaching parties may cancel the contract, ending any agreements, and sue the breaching party for restitution if the breaching party gained something from the contract. This gain could be, for example, a service or product. The goal of restitution is to put the non-breaching party back in the position they were in prior to the contract.


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