The Consequences of a Breach of Contract Include Damages
Damages are one of the most prevalent remedies for contract breaches. When a contract is breached, the non-breaching party may be allowed to seek damages to compensate for the losses incurred as a result of the breach. The goal of awarding damages is to put the non-breaching party in the same position as if the contract had been fully completed. There are two major categories of damage:
Compensatory damages- are meant to compensate the aggrieved party for the actual financial losses experienced as a result of the violation. Compensatory damages seek to restore the non-breaching party to the position they held prior to the breach occurring. Compensatory damages are intended to benefit the victim, whereas punitive damages are intended to punish the at-fault party.
Consequential Damages– also known as special or indirect damages, are those that occur as a result of the breach but are not caused directly by it. The violating party may be accountable for foreseeable losses resulting from the breach.
Breaching a contract can have serious and long-term implications. A breach can result in legal action, compensation, specific performance, reputational damage, and relationship breakdowns. Understanding the repercussions allows contract parties to be better aware of potential dangers and what steps to take if a breach happens.
Breach of Contract: Key Takeaways
Breach of contract: Failure to fulfill commitments under a legally binding agreement, resulting in injury to other parties concerned. There are three types of contract breaches: material breach, anticipatory breach, and minor breach, each with a different level of impact on the parties concerned.
Compensation for breach of contract: includes compensatory and consequential damages, restitution, liquidated damages, and punitive damages.
Consequences of violation of contract: legal remedies (damages), compensation, specified performance, and reputational and relational damage.
Examples of contract breaches include failure to pay, provide, or give substandard performance; unauthorized disclosure; and non-compete clause violations.
How To Reduce Your Risk
When you sign into a contract, you cannot completely prevent a violation because you have no control over the other party’s activities. However, this does not rule out the possibility of risk mitigation. One method to limit the risk of contract breaches is to establish the finest possible agreements- & businesses have a useful, but often overlooked, instrument that can help: legacy & archival contracts.
Analyzing previous agreements, both successful and unsuccessful, can assist you in identifying the terms and clauses that most effectively eliminate vulnerabilities. For example, if you analyze similar agreement types that all resulted in breaches, you may notice parallels in wording that can be avoided. (Pro tip: if locating previous agreements to undertake such an analysis is difficult, consider arranging your contracts in an electronic storage system that allows you to tag and categorize papers and is text searchable.)
However, even the most meticulously written agreements signed with the best of intentions can be breached. However, there are several measures you may take to lessen the risk and minimize your losses.
Consult a Contract Law Attorney in Florida about Your Case
To discover more about the available remedies for breach of contract in your situation, contact our Florida Breach of Contract Lawyer now. We can assist you in determining the forms of contract breach remedies to which you may be entitled. Contact us online or by phone to discuss your choices.