THE LEGAL IMPLICATIONS OF BREACH OF CONTRACT
Business agreements would be made in a perfect world where all parties would profit and be satisfied with the results.
THE LEGAL IMPLICATIONS OF BREACH OF CONTRACT
Business agreements would be made in a perfect world where all parties would profit and be satisfied with the results. However, in the actual world of business, delays can occur, money issues can arise, and other unforeseen circumstances might happen to hinder or even prevent a written contract from being carried out and one side may end up suing the other. Following is a discussion of the legal term "breach of contract" and a rundown of your legal remedies in the event that one does take place.
WHAT IS A BREACH OF CONTRACT
A breach of contract is a material non-compliance with the terms of a legally binding contract. Legally, one party's failure to fulfill any of its contractual obligations is known as a "breach" of the contract. Depending on the specifics, a breach can occur when a party fails to perform on time, does not perform in accordance with the terms of the agreement, or does not perform at all.
LEGAL IMPLICATIONS
Legal consequences typically refer to money damages. There are three primary measures of legal damages: “expectation damages,” “reliance damages,” and “restitution damages.” These types of damages are often referred to as “compensatory damages”—that is, their primary purpose is to compensate the harmed party for the economic loss they have suffered and put them in the position they would have been in had there been no breach.
Expectation damages provide the harmed party with the “benefit of the bargain.” That is, the court tries to put the harmed party in the position they would have been in had the breaching party fulfilled their obligations. Reliance damages provide the harmed party with compensation for expenses they incurred as a result of performing their obligations in reliance that the breaching party would perform their end of the deal too. Restitution damages provide the harmed party with compensation for any unjust enrichment the breaching party obtains by virtue of the breach.
You may have also heard the terms “incidental” and “consequential” damages. These are variations of the three primary measures of legal damages discussed above. There are also “punitive” damages, which are generally only awarded in extreme circumstances as specifically authorized by statute (and are typically not available in a breach of contract setting)
REMEDIES FOR BREACH OF CONTRACT
In contract law, a breach of contract gives rise to a cause of action where the innocent party has:
A right to monetary compensation, that is, damages for failures to perform the contract
If it's serious enough, the right to terminate the contract
In some cases, may obtain specific performance of the contract, or an injunction to restrain further breaches of contract.
Even then though, the terms of a contract can seriously limit or expand the rights of an innocent party to damages and the other remedies which might be available. When that happens, remedies that:
Would have been available are excluded, and
Might not have been available are accessible to the innocent party.
The consequences of a breach and the consequences of termination are quite different things. The consequences of a breach depends on the terms of contract itself and what the innocent party does when there is a breach of contract.
NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com
WRITTEN BY CHAMAN LAW FIRM TEAM
EMAIL: chamanlawfirm@gmail.com
TEL: 08065553671, 08024230080