Contracts are essential to almost every form of business, helping individuals and businesses establish boundaries and expectations around their business relationships. However, most relationships run into conflicts sooner or later, whether they are personal relationships or business.
In an ideal world, the terms of a contract help navigate conflicts in business relationships, allowing both parties to look through the terms of their contract to determine how to move forward. In some cases, one or more parties may violate the terms of a contract, which can have significant consequences.
If you believe that a company or individual violated their contract with you, or if some party claims that you violated your contract to them, it is important to understand the legal tools you have to protect yourself and keep your rights secure. With a strong legal strategy, it is much easier to understand the issues at hand and create a plan to resolve them fairly.
Common remedies for breaching a contract
Depending on the circumstances and the terms that one party or another violated, there may be many ways to resolve a breach fairly. The law lays out several ways to compensate victims of a breach of contract. In broad strokes, courts typically recommend financial compensation and may also require one or both parties to take specific actions.
Monetary compensation can take a number of forms, including:
- Compensatory damages, awarding the victim financially to make up for the terms of their contract that were not honored
- Restitution, where a court orders one party to pay money back to another party
- Nominal damages, in instances where a breach occurred, but no party suffered any notable losses or other forms of harm
- Quantum Meruit damages, where one party must receive payment for the portion of work they completed, even if they did not complete all of a given task or set of tasks.
It is also possible for a court to order a remedy in equity. Remedies in equity involve a court ordering one party or another to take specific actions, not merely pay financially for a breach. This may include “specific performance,” which orders a party to deliver on some aspect of their contract.
It is also possible for a court to cancel a contract and decide that both parties should move forward and dissolve their relationship without other forms of compensation.
Protecting yourself begins now
Breaches of contract can cause massive headaches for any employee, employer or contractor. If you find yourself in a breach of contract dispute, it is important to understand the tools that you can use to protect yourself.
If you have not begun building your legal strategy, you should begin today so that you can move forward from this difficult chapter while keeping your rights secure along the way.