Remedies for Breach of Contract Explained by DoNotPay
Breaches of contract are common, so anyone involved in business affairs should be thoroughly informed about what to do in such situations. DoNotPay is here to present the remedies for breach of contract to you in a straightforward manner and help you figure out how to proceed to right the wrong. We can also draw up a breach of contract demand letter for you.
If a client breaks the terms of the agreement you created, you need to weigh your options carefully to assess the best course of action. The appropriate remedy for a contractual breach depends on the:
- Terms of the contract
- Nature of the breach
- Specific circumstances of the case
You must understand the terms of the contract inside out to apply the correct remedy. There are several solutions for contractual breaches, including the following:
- Compensatory damages
- Liquidated damages
- Specific performance
- Nominal damages
The most common legal remedy for breach of contract is compensation. The amount of money you can receive typically depends on the losses you’ve experienced as a result of the contractual breach.
There are two categories of compensatory damages:
- Expectation damages—They directly result from the breach of contract
- Consequential damages—They result from natural consequences of the breach and often comprise profits that you lost as a result of the breach
Liquidated damages are a specific amount you agreed on with the other party as compensation for a contract breach. This type of damage provision is usually used when it is hard to calculate the correct amount of compensatory damages. Construction contracts and real estate purchase agreements mostly rely on liquidated damages.
The court might disregard liquidated damages clauses if the predetermined compensation is a lot smaller or greater than the harm the plaintiff experienced.
If the injunction is chosen, the court will order a party not to proceed with specific activities. There are two types of injunctions:
- Temporary injunctions—Ordered while litigation is pending to stop potential damage
- Permanent injunctions—Can be issued by the judge as part of their final ruling in a lawsuit
Specific performance is similar to an injunction, but the difference is that the court orders the breaching party to do something. Monetary remedies are usually the first choice compared to specific performance, but there are situations where money will not compensate you adequately. This equitable remedy applies when the violating party must perform a particular activity to allow the plaintiff to benefit from the original contract.
If a breaching party cannot meet the court's demand for compensatory damages, a judge can award nominal damages as a legal remedy for the breach of contract. Even though the court recognizes that the breach of contract occurred, the financial loss is not significant enough.
In case the agreement has an attorney fee provision, the nominal damages award can allow you to seek the reimbursement of your attorney’s fees from the defendant.
Using rescission as a contractual breach remedy allows you to cancel the contract instead of seeking monetary damages. You can refuse to complete your end of the bargain, so both parties are free from any contractual obligations.
You should note that the breach of contract must be material to justify rescission.
If you want to demand compensation for breach of contract, you have these options at your disposal:
- Writing a demand letter—This option requires legal knowledge, and using an online generic demand letter template will usually not suffice
- Hiring a lawyer—Attorneys are an elegant solution, but their fees are sky-high
- Hiring a collection agency—Another efficient yet pricey option
- Using DoNotPay—Opting for the world’s first robot lawyer enables you to get an airtight legal document at an affordable price
The easiest way of getting a rock-solid demand letter is with DoNotPay. Our app will study all the breach of contract elements and ensure that your legal document contains strong arguments to support your case. These are the only steps to follow:
- Sign up for DoNotPay
- Choose the Client Breach of Contract product
- Answer the chatbot's questions about the client and the agreement you had
- Add a payment deadline for the client before you take further legal actions (such as a lawsuit)
- Include photos as evidence if you have any
DoNotPay will also provide you with necessary information about the affirmative defenses to breach of contract.
Take a look at the table below to see the state-specific rules and requirements for creating a demand letter:
|South Carolina||North Carolina||Florida|
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