It’s the most fundamental concept of doing business—you provide another person or entity with something of value, and you get something back. The most successful businesses have strong underlying contracts under which they operate. Even the most well-negotiated contracts don’t guarantee that you will never deal with a party that doesn’t perform as agreed. Depending on the nature of the contract breach (material vs. non-material), you might be entitled to damages.
Before awarding damages, a judge or jury must determine there was a breach of contract in the first place. At the foundation of a breach of contract claim is a valid and legally enforceable contract. A legally enforceable contract involves two parties which agree to do something (perform or pay, usually) in exchange for something else. An important component of a valid business contract is consideration, which means both parties agree to give and receive something of material value.
Awarding monetary damages in a breach of contract case is usually the easiest way to make the injured party whole. As in many other types of civil cases, there are several types of damages available in a breach of contract case. General or compensatory damages are designed to put the injured party in the position it would have been in if both parties had performed under the terms of the contract.
Special damages are awarded when the injured party experiences an indirect loss from the breach of contract. This type is not awarded nearly as frequently as compensatory damages. Sometimes, the contract will stipulate the amount of damages an injured party will receive in a breach of contract; these are referred to as liquidated damages.
Rescission of the Contract
If there are no other remedies available to an injured party, the court may simply order rescission. In this situation, both parties are relieved of their obligations under the contract. Both parties to a contract may agree to rescission, or it may be unilateral if one party materially breaches the contract. Fraud is often a precursor to rescission.
Think of restitution as a refund of sorts. In certain breach of contract cases, the best way to make the injured party whole is to simply put the party in the position it was in before the contract was made. Restitution is often ordered when the contract is unenforceable or cannot be fulfilled due to impracticability.
Occasionally, the remedy for a breach of contract is to simply have one side perform his or her obligations under the contract. This is a similar remedy to compensatory damages. The difference here is that monetary compensation would not be sufficient to make the injured party whole. If a party pays another party to deliver a specific type of good that nobody else can deliver, the breaching party might simply be ordered to deliver the product.
Speak to A Quality Business Attorney Today
Not receiving something as stipulated in a contract your company is under could directly threaten the viability of your business. If you have so much as received indications that another party might not perform, you should speak to a Florida business lawyer as soon as you can to discuss your options. Trembly Law Firm aims to help businesses large and small succeed, and we would be happy to speak with you soon. Call the firm at (305) 431-5678 to set up an appointment.