Breaching vs Non-breaching Parties in a Contract Dispute
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Can a Breaching Party Recover Damages In a Contract Dispute?
A breach of contract
occurs when either party fails to perform their duties as stated in the terms of the contract.
If one party has not committed a breach at all, they are usually entitled to receive the value of the deal that would have been received under the contract terms. They will also be excused from rendering their part of the agreement, such as paying for services.
Sometimes it is the case that both parties have breached the contract in some way. For example, in a contract for the sale of goods, one party may have failed to deliver the merchandise, while the other party simultaneous rendered less payment.
In such situations, a breaching party traditionally was not allowed to recover damages. However modern rules state that:
- Some jurisdictions allow the breaching party to recover only amounts that are limited to the contract price
- The amount of damages receive by the breaching party will be reduced by any damages suffered by the other party due to the breach.
Thus, it is sometimes possible for a breaching party to recover damages. Such damages are a called restitutionary damages
and are aimed at restoring the breaching party to their economic status before the damage occurred. The burden is on the breaching party to show the extent of the damage that they incurred.
Also, the breaching party cannot recover damages if the damages were foreseeable and could have been avoided, or if such damages are specifically prohibited in the terms of the contract. Check with an attorney to see if your jurisdiction’s rules regarding such actions.
Should I Hire a Lawyer for a Breach of Contract Dispute?
Whether you are the party being sued or both parties have committed a breach, it is advisable to consult with an attorney regarding your claim. Even if you have committed a breach, it may still be possible to recover damages if you yourself have incurred some form of economic loss. A competent business attorney
can propose the correct course of action for your situation.
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Last Modified: 12-19-2014 05:09 PM PST
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