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What Are the Legal Remedies for Breach of Contract?

A contract may be canceled because of a breach in the terms that the parties desired.
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  • Written By: N. Madison
  • Edited By: Jenn Walker
  • Last Modified Date: 26 September 2014
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A breach of contract occurs when a party who has signed a contract fails to live up to his responsibilities as specified in the contract. There is a range of legal remedies for breach of contract. For example, a person may be entitled to monetary compensation in the event that the other party fails to live up to the terms of the contract. A contract may also be canceled because of a breach or changed to include the terms the parties desire. In some cases, a judge may even order either party to live up to the terms of the contract.

The remedies for breach of contract cases may depend on the jurisdiction in which a contract is valid. In many cases, a party who is dealing with a breach of contract may sue the other party on court. In such a case, a judge may decide to rule in either party's favor and apply the remedies applicable based on the jurisdiction's laws. In some cases, however, the parties in a breach of contract case may attempt to reach an agreement without going to court. For example, a breach of contract case may be settled in mediation rather than in a courtroom.

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Many of the legal remedies for breach of contract involve monetary compensation. In some cases, a judge will award the wronged party money following a breach of contract. For example, a judge may award money to reimburse a party’s losses as well as attorney's fees and court costs. Sometimes a judge may also award punitive damages, which is essentially money awarded to punish the person who is in the wrong. Punitive damages may be awarded if a judge believes the party who breached the contract acted in an intentionally malicious manner.

Sometimes a breach of contract case or mediation session may result in changes to the agreement. In such a case, the contract may be altered to include the terms the parties will live up to going forward. In other cases, the contract may be canceled altogether. A judge may also order either party to comply with the terms of the contract, but this solution is applied less frequently.

Before the application of legal remedies for breach of contract, a judge may need to determine whether a breach of contract has actually occurred. The laws for determining this may depend on the jurisdiction in question, but there is a general set of rules a judge may consider when deciding. Usually, a breach of contract occurs when either or both parties fail to perform the actions specified in the contract, but there are two general exceptions to this rule. If the parties agreed to changing the terms, this is not considered a contract breach. Likewise, if acceptance of the changes is implied by either party's actions or lack of action, some jurisdictions will not consider the changes a breach of contract.

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Markerrag
Post 2

Whenever you enter into a contract, read it with the idea of breach in mind. That might seem cynical, but it's really not. A huge contract that rambles on for pages could be a trap -- you could fall into breech without meaning to or even knowing that you did. In case of those complex contracts, review them with an attorney. If the matter is that complex, you want to know what you are getting yourself in for before you sign it.

Logicfest
Post 1

In some states, the judge has no discretion when it comes to awarding attorney's fees -- he or she is required by statute to award attorney's fees to the winner. Apparently, that was put in as another way to punish people who breech contracts and encourage them to follow through on their agreements.

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