Once you are able to prove that there was an enforceable contract and that the other party committed a breach of contract, you can start to consider the possible remedies. The main goal of the Court, when finding the best remedy for each case, is bringing the victim or injured party as close as possible to the position he or she would have been in if the other party hadn’t breached the contract.
The Court calls the resolution a remedy, and is allowed to find the best remedy in different ways and may even be creative. There are five basic types of relief available to victims of a breach of contract, with two different kinds of damages.
Compensatory vs Punitive Damages
The main goal of the courts is to make the damaged plaintiff whole again if there is an injury, but punitive damages are also available if there is a perceived need to punish the defendant.
This is the most common kind of remedy awarded by the courts and is designed to compensate for losses the plaintiff incurred, that wouldn’t have been incurred if the contract hadn’t been breached.
The courts in these cases are only allowed to stick by the evidence presented and compensate the actual amount lost. If you only lost out on a small part of what was owed, the award must just be that small part.
Punitive or exemplary damages don’t have the same limits as compensatory damages. If the Court decides that the plaintiff in your case acted willfully, maliciously or fraudulently, you may be entitled to punitive damages.
A word of caution – punitive damages are rare in breach of contract cases, where damages are usually monetary. They are much more common in tort cases, where the wrongdoing resulted in personal harm to an individual or individuals. You may be able to receive punitive damages if you can prove the act was egregious, or the defendant knew how serious the harm would be.
Specific Kinds of Remedies for Breach of Contract
The Court has choices as to how to make the plaintiff whole. While most people only think of money when it comes to damages in a civil suit, the Court can also force the defendant to perform certain actions, or prohibit the defendant from performing certain actions.
Here are some of the specific kinds of remedies a Court has at its disposal:
This remedy is specifically designed to restore the plaintiff to the state the plaintiff was in before entering into the contract. This method doesn’t address issues like profits the plaintiff might have been able to earn if the defendant followed through, or other kinds of losses that may have come after.
When a court orders restitution, it orders that whatever money or property the defendant received as part of the contract be returned. If, for instance, you paid $500 for a musical instrument but didn’t receive the instrument, the Court can order the defendant to give you your money back.
When the Court orders restitution in such a case, the contract can now be considered void. This is a remedy often uses when it turns out that the defendant is incompetent or incapacitated. This could happen if you discover the other party to the contract is a minor, and unable to enter into the contract, or if the defendant becomes permanently incapacitated due to permanent illness or injury.
Rescission is considered an equitable remedy under law, and in these cases, the Court orders the original contract be rescinded, or taken back. The Court may decline to rescind the contract either one of the parties has affirmed the contract with an action or if rescinding the contract would harm a third party involved.
A plaintiff might ask a contract be rescinded because the defendant used coercion or undue influence, or because there was a mistake. Once the contract is rescinded, the parties will have to return anything they received as part of the contract.
Like rescission, reformation is a remedy available to some parties when it turns out the contract was entered into based on fraud, undue influence, coercion or mistake. The difference between rescission and reformation is that in the case of reformation, the Court can change the substance or terms of the contract to make the terms more equitable for the injured party.
Sometimes the best and most equitable remedy is for the Court to enforce the contract. This is an unusual solution, and the Court won’t usually consider this unless monetary damages would be inadequate.
Normally the Court will not try to force parties to commit actions against their will. There are some times when money is inadequate, such as when the contract was to buy a unique work of art. If the art piece is one-of-a-kind, the Court might order the defendant to follow through with the contract.
Are You a Victim of Breach of Contract?
In order to receive the remedy you deserve, you will need to convince the Court that the other party breached a valid contract and that there is a suitable remedy under law. If you have any questions or want help with your case, call Cronus Law PLLC. We offer full services for our Phoenix, AZ clients in several areas, including business law, real estate law and other areas dealing with contract law.