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What are the potential remedies for a breach of contract?

On Behalf of | Sep 29, 2022 | Business Law & Litigation

Contracts are an essential part of running a business in the Sacramento, California, area. Businesses rely on other businesses, customers and clients to fulfill their obligations under contracts to ensure that their business runs smoothly and efficiently. When another party to a contract fails to fulfill their obligations, it can hurt production and cause significant financial issues as well.

When this occurs, businesses may need to start a breach of contract lawsuit against the breaching party. The goal of the breach of contract lawsuit is to be made whole and limit the damages the company incurs as a result of the breach. To accomplish this goal, there are a few different types of damages that the non-breaching company can seek through the lawsuit.

Types of damages available in breach of contract lawsuit

One is monetary compensation for the money they lost as a result of the breach. For instance, if the contract stated that one party agrees to pay the company $25,000 for a certain job and does not pay them, the nonbreaching company could seek the $25,000 from the breaching party. Also, there are some contracts that state a specific dollar amount for damages if one party breaches.

Another type of monetary damage is compensation for money spent by the nonbreaching party, who is relying on the contract. If a company had a contract to rent a specific space or complete a certain project and bought materials and other products in anticipation of the contract being fulfilled, the breaching party may also need to compensate them for the costs of the materials they purchased.

In situations where, monetary compensation will not make the nonbreaching party whole, companies could seek the remedy of specific performance, which is basically ordering the breaching party to fulfil their obligations under the contract.

Many businesses in northern California are part of contracts that are breached for one reason or another. Being made whole is what is important in these situations, but getting there can be complicated. Experienced attorneys understand the various remedies available and may be able to help companies be made whole again.