When one party breaches the contract, it most likely negatively impacts the other. A court may order the breaching party to compensate the other for the harm done. This compensation is called damages. Damages in a breach of contract lawsuit largely depend on the type of breach, the terms of the contract, as well as the severity of the breach. In this blog post, we will discuss potential damages available in a breach of contract lawsuit.
This is the most common type of damage awarded in breach of contract lawsuits. It is intended to compensate the non-breaching party for any losses due to the breach. Typically, the compensation is equal to the monetary loss. Non-monetary losses such as pain and suffering are typically non-compensable.
In restitution, the breaching party pays the other back to restore them to the position they were in before the breach. Unlike compensatory damages, restitution does not include lost earnings or profits due to the breach.
Liquidated damages are when a contract includes a provision with a predetermined amount of damages should either party breach the contract. There may be legal challenges raised to the enforceability of these types of damages.
A court may issue nominal damages when a breach has occurred but there has been no financial loss as a result. These damages are a very small amount such as $1.
In Latin, Quantum Meruit means what one has earned. If a contract does not specifically state how much a service is worth, the court can decide. The court will compensate the party based on the work completed.
Remedies in Equity
Rather than pay monetary damages, the court may order a party to do something. This is a less typical remedy, as issues often arise with interpretation and enforcement of these orders.
This type of damage is rare, and it is not available in a typical breach of contract suit, but may be available if there are other claims in addition to a breach of contract. Punitive damages punish the breaching party in efforts to deter them from repeating the offense.