Define: Remedies For Breach Of Contract

Remedies for breach of contract are legal solutions available to parties when one party fails to fulfil its obligations under a contract. These remedies aim to compensate the non-breaching party for any losses suffered due to the breach and to enforce the terms of the contract.

The availability of these remedies depends on various factors, including the terms of the contract, the nature of the breach, and the laws of the jurisdiction. Parties to a contract should carefully consider these remedies when drafting and negotiating their agreements to protect their interests in the event of a breach.

In the case of breach of contract, the following remedies may be sought from the court:. There is a time limit within which any of these remedies must be sought, as set out in the Limitation Act of 1980.

Common remedies for breach of contract include:

Damages: Damages are monetary compensation awarded to the non-breaching party to cover the losses incurred as a result of the breach. There are different types of damages, including compensatory damages (aimed at restoring the non-breaching party to the position they would have been in had the contract been performed), consequential damages (covering indirect losses resulting from the breach), and punitive damages (awarded to punish the breaching party for egregious conduct).

Specific Performance: A specific performance is a court order requiring the breaching party to fulfil its contractual obligations as outlined in the contract. This remedy is typically sought when monetary damages are inadequate to fully compensate the non-breaching party, such as in cases involving unique or irreplaceable goods or services.

Rescission: Rescission involves cancelling the contract and returning the parties to their pre-contractual positions. This remedy is often sought when the contract was entered into based on fraud, mistake, or undue influence.

Restitution: Restitution is a remedy aimed at restoring the non-breaching party to the position they were in before the contract was formed. It typically involves returning any benefits or payments received under the contract.

Liquidated Damages: Liquidated damages are pre-determined amounts specified in the contract that the breaching party must pay in the event of a breach. These damages are intended to compensate for anticipated losses and avoid the need for costly litigation to determine actual damages.

Common law damages If a case of breach of contract is proved, then the plaintiff has a right to damages. The extent of the damages will be decided by the court and often won’t be as large as the defendant’s claim. Two principles act to limit the award of damages.

• Duty to mitigate. If the plaintiff could easily recover from a breach of contract (e.g., by doing business with someone else), then he has a duty to do so. The courts will not make good losses incurred by a plaintiff’s failure to act sensibly.
• The remoteness of damages. Damages will normally only be awarded for the direct effects of breach of contract. Of course, a breach can have far-reaching consequences in some cases, but it is argued that the defendant ought only to be liable to the extent of damages he could reasonably foresee.

Equitable (discretionary) remedies These are remedies that may be awarded at the discretion of the court, possibly along with damages.

• A court Injunction.
• An order of specific performance.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 10th April, 2024.