What Types of Damages Are Available in Breach of Contract Cases?

 Posted on December 15, 2022 in Commercial Litigation

There are numerous situations where creditors or other companies may need to address a breach of contract through commercial litigation. A breach of contract occurs when one party fails to fulfill a contractual obligation, resulting in financial losses or other damages for the other party. If a contract has been breached, the non-breaching party may pursue litigation and seek compensation or other remedies from the breaching party. Creditors who need to address issues related to breach of contract will need to understand the remedies that may be available so that they can recoup the losses they have experienced due to the breach. The remedies available for a breach of contract may include:

Compensatory Damages 

Compensatory damages are awarded to reimburse the non-breaching party for any losses incurred as a result of the breach. These losses may include lost profits, lost wages, and other monetary losses. Compensatory damages may also cover expenses related to mitigating or avoiding further losses due to the breach, such as the costs of hiring a new contractor or purchasing new materials. Compensatory damages are intended to put the non-breaching party in the position they would have been if the breach had not occurred. 

Punitive Damages  

Punitive damages are intended to punish and deter intentional wrongdoers from repeating their behavior in the future. To be eligible for punitive damages, it must be proven that the breaching party acted with malicious intent or gross negligence or otherwise engaged in fraudulent behavior. Punitive damage awards tend to be higher than compensatory damage awards because they are intended to act as a deterrent for parties engaging in similar behavior. However, punitive damage awards are not commonly granted in breach of contract cases, since it can be difficult to prove that the breaching party intentionally disregarded their contractual obligations.

Nominal Damages 

Nominal damages may be awarded when there is no actual proof that any losses have occurred due to a breach of contract, but it is still necessary for a court to recognize that a breach has taken place. Nominal damages award a small amount as a symbolic recognition that there was indeed a breach, even though no real financial loss could be substantiated. This type of award does not provide much monetary relief, but it may allow both parties to move forward without having to go through protracted legal battles over whether there was an actual breach of contract.  

Specific Performance

In some cases, a court may order the breaching party to fulfill their contractual obligations according to the terms of the agreement. Specific performance can ensure that a breach of contract does not have a long-lasting negative impact on the non-breaching party and that they are afforded the benefits that were originally supposed to receive under the contract. However, this remedy is generally only granted in cases where there are unique circumstances that make it difficult or impossible for the non-breaching party to find another supplier or contractor who can provide equivalent goods or services.

Contact Our Chicago Breach of Contract Attorneys

Recovering damages in breach of contract cases can be complex, and it is important to understand the types of remedies that may be available. Creditors and other types of businesses should take these factors into consideration before deciding how best to proceed with legal action against a party who has breached a contractual agreement. At Teller, Levit & Silvertrust, P.C., our Cook County commercial litigation lawyers can provide legal help and representation in these situations. We can advise business owners on their options for resolving contract disputes, and we can provide strong and effective legal representation during litigation of these types of cases. To learn more about how we can assist with matters related to breach of contract, call our office at 312-922-3030 and set up a consultation.

Sources:

https://thebusinessprofessor.com/en_US/122296-law-transactions-amp-risk-management-commercial-law-contract-payments-security-interests-amp-bankruptcy/damages-in-a-breach-of-contract-action

https://www.liveabout.com/breach-of-contract-398138

https://www.investopedia.com/terms/b/breach-of-contract.asp