What Are the Possible Remedies for a Breach of Contract?
Business contracts are some of the most important elements of a successful business. However, when one party does not uphold its end of a business agreement, the other party can suffer considerable harm. A breach of contract occurs when one party does not fulfill the obligation it agreed to in a contract and the non-breaching party, or injured party, suffered financial harm as a result. The breaching party may be required to “remedy” the situation though one of several means. If your business has suffered due to a breach of contract, speak to an experienced Naperville business lawyer to learn about your legal options.
Potential Results of a Breach of Contract Claim
The purpose of a breach of contract remedy is to counteract the damage caused to the injured party. The most common remedy for breach of contract is the awarding of “compensatory damages.” This means that the breaching party is required to compensate the injured party for losses caused by the breach. The injured party is typically entitled to damages equal to the money it would have received had the contract been fulfilled. If the contract was only partially breached, the injured party may receive compensation for the cost of hiring a third party to complete the tasks originally assigned to the breaching party.
“Restitution” is a breach of contract remedy that restores the injured party to the position it was in before the contract was signed. Instead of paying damages to the injured party, the breaching party must return any assets it received from the injured party due to the terms of the contract. This remedy is often used when a contract is cancelled due to the breaching party’s incapacity or inability to fulfill the contract.
In some situations, a contract is nullified by the court because it was entered into though coercion, undue influence, mistake, or fraud. “Rescission” is a breach of contract a remedy that simply terminates a contract for all of the parties involved. “Reformation” is also a remedy used when a contract was entered into through fraud, error, coercion, or undue influence. However, instead of terminating the contract, the court modifies the contract to correct the injustices caused by the original contract.
“Specific performance” is a remedy that forces the breaching party to fulfil its obligations according the contract. This remedy is typically used when other remedies are not able to compensate the injured party for its losses. In many cases involving specific performance, the breaching party is required to transfer actual property to the injured party.
Contact a Naperville Breach of Contract Lawyer
If your business has been harmed because another party failed to uphold its contractual obligations, contact the Gierach Law Firm to discuss your options moving forward. Call our office today at 630-756-1160 and schedule a consultation with a seasoned DuPage County business law attorney.