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5 Breach of Contract Remedies

Business and Commercial Disputes By Binnall Law Group - 2021/06/16 at 08:37pm

An Alexandria Business Attorney Can Help With Your Case

If you’ve entered into a business agreement that was breached by the other party (or parties), then you may be entitled to damages under contract law.  However, first-time contract plaintiffs may not be aware of the remedies that they can — or should — pursue.  Depending on the circumstances of the case, a variety of remedies may be available.

Here at Binnall Law Group, our team has helped numerous clients sue and recover for contract breaches.  We understand just how overwhelming it can be to have an important contract fall through, and are committed to assisting those who have been affected — in many cases, we are able to secure a favorable result without the need for trial.  Contact an experienced Alexandria business attorney at our firm today to schedule a free consultation.

If you’d like to learn more about breach of contract remedies, we encourage you to keep reading!  Let’s take a brief look at some remedies available to breach of contract plaintiffs, across jurisdictions.

Expectation Damages

Expectation damages account for the compensation that is owed to the plaintiff for the defendant’s breach (to cover the plaintiff’s losses).  Expectation damages are meant to make the plaintiff whole again, financially — in other words, to put them in a position that closely approximates where they were prior to the breach.

Calculating expectation damages tends to be rather simple, as the plaintiff is entitled to recover for the direct losses they suffered due to breach.

For example, suppose that you enter into an agreement with the defendant.  The defendant agrees to pay you $10,000 for you to deliver a shipment of custom t-shirts.  You make the t-shirts and deliver them, but the defendant breaches the contract and refuses to pay you.  Ostensibly, you would have a right to sue and recover the $10,000.

Lost Profits

Lost profits are damages meant to compensate the plaintiff for the indirect losses they suffered due to the breach of contract — in other words, it is meant to put the plaintiff in a financial position that approximates where they would have been had the contract been fully completed. 

Lost profits are not available in every case.  Generally speaking, lost profits are only available where the circumstances make the loss reasonably foreseeable and not overly speculative.

For example, suppose that you enter into a contract to purchase a set of custom-made valves from the defendant.  You purchased those valves in order to manufacture another item, which you would be selling to a third party (for a profit of $20,000).  If the defendant breaches the contract and does not deliver the valves, then you will be unable to complete your sale to the third party, thus resulting in lost profits.  These lost profits are not overly speculative and are reasonably foreseeable given the circumstances.

Liquidated Damages

Liquidated damages are pre-negotiated in the contract.  Essentially, the parties to the contract agree on a specified amount for which they will be liable should they breach.

For example, suppose that you enter into a contract with the defendant to provide painting services.  The contract includes a liquidated damages provision for $10,000.  If the defendant breaches the contract, then they will be on the hook for exactly $10,000 — expectation damages and lost profits will not be considered.

Liquidated damages tend to keep disputes shorter and more efficient.  However, there are circumstances under which liquidated damages are unenforceable.  If the liquidated damages amount is excessive to the point where a judge would consider it to be patently unreasonable (this is further exacerbated by a difference in industry experience and knowledge between the contracting parties), then the liquidated damages provision will be deemed unenforceable.

Specific Performance

In some cases, the breaching party can be forced to fulfill their end of the contractual bargain through a “specific performance” remedy.  Generally speaking, however, courts lean against imposing specific performance remedies except where the services rendered are so fundamentally unique and valuable that there is no reasonable, alternative option available to the plaintiff.

Contract Reformation

In some cases, the contract may be unworkable or unenforceable as written, but the court will find that the intent of the parties is to cooperate and complete an exchange of goods and services.  Under these circumstances, the court may choose to “reform” the contract — in other words, rewrite it so that it more accurately reflects each party’s intentions, while being legally enforceable.

Whether a contract can be rewritten is a highly fact-specific issue.  Some contracts may be effectively drafted, except for a provision or two that is ambiguous and unenforceable as written — these contracts are prime targets for reformation, as a small portion of the contract can be rewritten better to maintain the larger whole.

Contact an Alexandria Business Attorney for Immediate Assistance

Here at Binnall Law Group, our attorneys boast decades of experience helping clients with a wide range of disputes, including those that center around a breach of contract issue.  We help clients navigate the challenges of contract litigation, from start to finish — in many cases, we are able to settle a case during early negotiations before the dispute ever gets to trial.

That being said, we have extensive experience taking a case all the way through to trial, if the circumstances require it.

Every case is different.  We work closely with clients to ensure that we are tailoring our representation to the particularities of their cases.  As a result, we gain deep insights into their case and are able to develop effective and specific legal strategies.

Ready to speak to an experienced Alexandria business attorney at our firm?  Call us at 703-888-1943 or complete an online intake form to schedule a consultation.