Business Contract Litigation: Remedies for Breach of Contract

 Posted on June 22, 2022 in Uncategorized

Contracts play an important role in a business’s ability to operate successfully. When a business makes a deal with a vendor, a client, its employees, or other parties, everyone who signs the agreement is expected to hold up their end of the bargain. Unfortunately, there are many cases where contract breaches occur, such as when a company fails to complete work on time after receiving payment. While it may sometimes be possible to resolve disagreements about contracts through communication or negotiation, a party that suffered losses because of a breach of contract may pursue litigation to address these issues. In these situations, it is important to understand the orders that may be made by a court to correct the breach.

Common Remedies in Breach of Contract Cases

To succeed in contract litigation, one party to a contract will need to meet certain requirements, including demonstrating that the contract was legally valid, that the other party failed to meet some or all of their requirements, and that they suffered losses or other damages as a result of the breach. If a plaintiff can prove all of these elements, the court may impose certain penalties or requirements on the party that breached the contract (the defendant).

In many cases, the plaintiff will seek monetary damages from the defendant. These usually take the form of compensatory damages, or repayment for the losses they experienced. These may include both direct and indirect losses. For example, if a manufacturer had a contract with a supplier to deliver certain materials, but the supplier did not deliver the materials by the expected date, the manufacturer may have suffered direct losses because it was unable to build and sell products. However, it may have also suffered indirect losses because its failure to deliver products on time led its customers to cancel orders or back out of business deals, resulting in additional financial losses. The plaintiff may seek compensation for all of the losses that occurred because the supplier did not meet its contractual obligations.

In addition to compensatory damages, a court may sometimes impose punitive damages as punishment for egregious violations. However, these will usually only be a factor in cases where one party to a contract committed fraud or other violations of the law or acted with the intent to cause harm to the other party. In some cases, a contract may specify the amount of damages that will be paid if a breach occurs. These are known as liquidated damages, and the court may require them to be paid by one party to the other.

In addition to or instead of monetary damages, a court may also issue an order of specific performance. This will require the party that breached the contract to uphold the terms of the contract and meet some or all of their requirements as originally agreed. 

Contact Our Tarrant County Contract Litigation Lawyer

At Gonzalez Law, PLLC, we can provide representation to those who are seeking to address a breach of contract by another party, or we can work with those who are accused of violating a contract to determine their legal options. We will work with you to resolve these matters successfully and help you protect your business’s bottom line. Contact our Fort Worth business litigation attorney at 817-349-7330 to schedule a free consultation and learn more about our legal services.

Sources:

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

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

http://jec.unm.edu/education/online-training/contract-law-tutorial/remedies-for-breach-of-contract