Introduction
Some remedies for breach of contract are given in the Contract Law. Breaching of a contract occurs when the contract parties fail to fulfill their obligation towards the contract. As we know, a well-written contract is essential for success in a business organization. A business transaction can run smoothly if the contract parties trust each other. However, that is not possible in the business world. Every deal goes straightforward. Enter into a contract with a legal base is safe for a business organization. Sometimes, all contracts still need to be completed, and breach of contract.
There are several remedies available in the case of breach of contract. However, a contract must be legally valid. In this article, we address the remedies for breach of contract. So please stay tuned and read below;
What is a breach of contract?
A contract breach occurs when the contracting parties fail to perform their obligations under the terms and conditions of an agreement. In other words, a breach of contract means it violates the terms and conditions of a legally valid contract. Some remedies are available for breach of contract, but they depend on various factors, such as the nature of the contract, terms and conditions, legality, specific events, etc.
The breaching of the contract can not be noted commonly, and there needs to be a straight jacket formula to find out a breach of contract. It varies in different circumstances and events. There are common types of contract breaches are given below;
Types of Contract Breaches
Contracts contain different terms and conditions according to the needs of contracting parties that make them legally binding. As per that, a breach of contract can be classified in other ways, which are given below;
If we talk about the remedies for breach of such a contract, the affected party can file a lawsuit against the party responsible for the damages. Here, the sufferer party can claim the damages resulting from a contract breach.
A minor breach of contract
A minor breach of contract is not a heavy and severe breach compared to a material breach. It is also known as an immaterial or partial breach of contract. It refers to circumstances when the other party fails to complete some of their obligations. However, that breach does not prevent the completion of the contract. In that case, if an affected party suffered a breach, they can seek a legal remedy, and they need to prove such a breach is a result of financial losses.
Anticipatory breach of contract
The actual damages do not occur in anticipatory breach of contract. However, it will come out when a contracting party refuses to fulfill their part of the obligation. Because of the conduct of that party, the completion of a contract is impossible. There is no need for the breach of contract actually to occur. The contracting party can be liable for its bad intentions and conduct regarding not fulfilling the obligation of an agreement. Such a claim can be made based on action or indication by the other party that it does not want to fulfill its commitment to the contract.
Actual breach of contract
The actual breach of contract means that such contract is an actual breach by the contracting party. In that case, the contracting party who breaches an agreement does not fulfill their part of the obligation within the contract period or needs to complete their duties or part correctly.
In the case of an actual breach of contract, the affected party has various remedies available to protect their legal rights or damages. The affected party can claim compensatory damages that directly resulted from the breach. In some cases, the sufferer party can claim consequential damages if they result from the breaching party’s misconduct. Such damages are covered under indirect losses that may be valued beyond the contract. However, they count as a result of a breach of contract.
What does a remedy mean in Contract law?
In contract law, a remedy is a court order that is provided to the affected party of the breach of contract as a resolution or compensation by the court. Remedies aim to protect the rights of the non-breaching parties of the contract. In contract law, the non-breaching party is also known as an injured party.
Remedies for breach of contract
The main aim of a remedy is to protect the rights of an injured party who suffered from a breach of contract. There are some remedies available for the breach of contract. All these remedies do not give the same benefits to the injured party, which may vary depending on the terms and conditions of the agreement. Sometimes, it also depends on the nature of the breach of contract and specific situations. Some of the common remedies are given below;
Compensatory Damages
Compensatory damages can cover all kinds of direct damage that the injured party bears from the breach of contract. They are given to the applicant who claims them. Such types of damage are also called general damage, which is covered under remediation in terms of monetary damages.
Special damages
Special damages result from a breach of contract. In that case, the injured party not only suffered the loss directly caused by the breach, but they may also suffer a loss in the form of profit that they can make through the contract.
Liquidated Damages
In some cases, the contracting parties include a remedy for damages clause in case of a breach of contract and fix a sum for that. If contracting parties reach an agreement, they have to pay that amount to the other party as a penalty. It will be valid for the applicant if he honestly claims the damage and invalid for the other party who breaches a contract.
Punitive damages
These remedies are also included in that category, and sometimes, they result from the behavior of the contracting parties. This is termed punitive. The contracting party may be punished for the breach of their obligation, whether it is intentional or negligent.
Rescission
Rescission is a remedy that permits the non-breaching party to cancel the contract. Through this remedy, the non-breaching party can return to their actual position before entering the contract. The Rescission remedy is only available if the breach is a material part of the agreement.
Specific Performance of the Contract
Specific performance is a remedy that the court provides in the case of breach of contract. A non-breaching party can approach the court and pray for a performance of their obligation against the breaching party. If the court thinks fit after observing evidence from both parties, it can pass such an order to the breaching party. The remedy of specific performance is available only when compensatory damages are inadequate to compensate for the affected party.
Injunction
The court provides the remedy of Injunction. The affected party can pray to the court to pass an injunction order against the breaching party. The court may pass an injunction order against a party who tries to harm the non-breaching party. This remedy is only available to the affected party suffering an irreparable loss if the obligation is not fulfilled in their favor.
Conclusion
Several remedies are available provided by the legislation in the case of a breach of contract. A breach of contract occurs when any of the contracting parties fail to complete their part of the obligation towards the contract. In such cases, the sufferer party has the right to follow some remedies, like Compensatory Damages, Special damages, liquid damages, Punitive damages, specific performance, Injunction, etc. Through these remedies, a sufferer party can protect their loss or damages.
Also Read:
What is a Legally Binding Contract Under the Contract Law?
What is an Unenforceable Contract under the Contract Law?
What is the Standard Form Of Contract?
