Breach of Contract Damages

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What Is a Breach of Contract?

A breach of contract occurs when one party fails to perform their duties and responsibilities that are spelled out in a contract. A breach can also occur when they perform their duties in a manner that doesn’t conform to the standards of quality that are required in the contract.

Some examples of actions that usually result in a breach of contract may occur:

When providing a remedy for a breach of contract, a court will usually issue either: damages awards (monetary amounts) or an equitable remedy (such as an injunction).

What Types of Damages Are Available for a Breach of Contract?

In most breach of contract cases, the main damages award is the compensatory damages award. This award directly reimburses the plaintiff for losses caused by the breach. This usually covers lost profit, for instance if the plaintiff paid for a product but never received it. It may also cover other costs, such as monetary amounts that the plaintiff was expecting to receive from the contract agreement (“expectation damages”)

In other cases, more specific damages awards may be issued. For instance, a “liquidation damages” award results for losses that are difficult to foresee at the time of contract formation. Other damages, such as punitive damages (issued in order to punish the defendant) are only issued in very specific cases.

What Are Special Damages?

Special damages may be issued in order to cover losses that aren’t included in a more general damages award. These are losses that result from or “flow from” a breach of contract. These include losses such as loss of business opportunities, damage to business reputation or goodwill, and loss of business property.

Do I Need a Lawyer for Help with Damages in a Breach of Contract Lawsuit?

Calculating damages is not always a straight-forward task. There can be many different factors involved in each case. You may wish to hire a lawyer if you need help with a breach of contract claim. Your attorney can advise you on how to file a claim for breach of contract. A qualified lawyer can also assist you with other contract aspects such as drafting and editing an existing contract.

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Last Modified: 12-19-2013 12:12 PM PST

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