Ideally, two parties would enter into a business contract, be happy with the outcomes, and no dispute would occur. However, we’re not in an ideal world—financial problems may emerge, delays can happen, and other unforeseen events may surface, which may prevent a written contract from being executed, and a party may end up suing the other party.
Here’s our business law attorney in San Diego discussing what breach of contract is and what one can do in such cases!
What is a breach of contract?
When the parties enter an agreement, a business contract creates some obligations that every participating party must fulfill. In legal terms, if a party fails to fulfill any of its contractual obligations, it will count as a breach of contract.
Depending on the specific case, a breach can occur when a party doesn’t perform at all, doesn’t perform in accordance with the terms of the agreement, or doesn’t perform at all. Now, a breach of contract can either be classified as an immediate breach or a material breach for identifying the ‘remedy’ for the breach—the appropriate legal solution.
What to do in the event of a breach of contract?
Regardless of the breach of contract you’ve experienced, you should know what types of remedies are available to you.
Mostly, whatever you’ve lost from the broken contract, you’ll be able to get some money. Here are some common monetary damages and remedies in the event of a breach of contract:
- Attorney’s fees: In contract cases, when authorized by statute or included in the contract, these are recoverable as damages.
- Punitive damages: These are for offensive actions or behavior from the defendant. However, this is rare in breach of contract cases.
- Liquidated damages: These are agreed damages that the contract specifies.
- Incidental or consequential damages: These are offered if everyone involved knew the potential losses when a breach occurs.
- Compensatory damages: These pay money to compensate for losses and reimburse costs.
In some breaches of contract, there’s more than just money involved. However, these cases have common remedies too, which include:
- Reformation: This happens when the contract is rewritten to better align with the contract’s actual intention.
- Rescission: This happens when a matter is dropped, any money is returned, or the contract is canceled.
- Specific performance: It’s a court order for every business or person to follow through with the initial agreement.
Often, the contract includes options for remedies. Before thinking of any legal action if a breach of contract occurs, it’s advisable to review the contractual agreement thoroughly and determine any requirements or limitations to ensure you don’t waive contract remedies unintentionally.
Get personalized attention and responsive services from Top Performance Legal – one of the best law firms in San Diego
Our top corporate lawyers in San Diego are dedicated to offering result-oriented legal services by offering clients a combination of creative solutions and aggressive representation to clients in California and across the US.
Contact our business dispute attorneys in San Diego now for more information!