Breach of Contract Remedies

Breach of Contract Remedies

BREACH OF CONTRACT

The most common remedy for breach of contract in Chicago, and every other city across the nation, is money damages. Here are the major types of remedies for breach of contract money damages.

  1. Direct damages: there are a wide variety of measures, but basically this means you are entitled to the benefit of your bargain. If you were going to paint someone else’s garage for $100 and earn $40 profit, but the garage owner breaches the contract and will not permit you to paint it, you will get the profit you would have earned if you had painted it.
  2. Incidental damages: often a breach of contract requires you to spend money to mitigate the effect of the breach. So if you had a contract to paint a garage and the garage owner told you in advance that he would not let you paint it, you might have advertised your painting services in the newspaper seeking another contract to replace the one that your opponent breached. The cost of the advertisement, even if unsuccessful, is recoverable.
  3. Consequential damages: these are the most difficult to obtain. Assume that the profits from the garage painting contract were going to permit you to make an investment in a golf course. If the painting contract is breached, can you get the profits you lost from not being able to invest in the golf course? Generally, no. But there are often closer questions presented, so it is always a good idea to review the facts to see if consequential damages can be obtained. One key fact to remember is whether the breaching party knew of the potential loss of consequential damages before it entered into the contract.

Sometimes the contract sets forth a lump sum of what damages can be obtained. Usually called liquidated damages, they are generally enforced if they are not a penalty, if they are a reasonable estimate by the parties of the foreseeable damages and if that estimate is difficult to make.

Sometimes the contract forbids or limits damages that can be recovered. These provisions are generally enforced unless unreasonable. For more helpful research topics, click here.

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