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What are the potential outcomes for a breach of contract?

On Behalf of | May 24, 2023 | Business Law

The whole purpose of a contract in California is to ensure that the people entering into it do what they say they are going to do. The contract will state the obligations of each party to it and they will then sign it, agreeing that they will do what it states. Contracts are used for many different purposes, but they are also just written documents and cannot physically force the parties to abide by their obligations.

There are times when one party to the contact does not do what they are supposed to do. This is known as a breach of contract. When this occurs, it can be very detrimental for the party who did not breach the contract and the non-breaching party is generally entitled to damages as a result.

Potential remedies for breach of contract

There are different types of damages available to people, depending on the type of breach. In many situations, the remedy in a breach of contract claim is that the breaching party is ordered to pay the economic damages suffered by the non-breaching party. For example, if the breaching party did not pay in full, generally, the damages are the amount they owed the non-breaching party under the contract.

There are times when the non-breaching party may be able to recover more than the actual damages. As mentioned above, people rely on contracts. If, based on their reliance on the contract, people made other choices, assuming the breaching party would fulfill their obligations, the non-breaching party may be able to receive compensation for the additional damages they incurred based on the reliance.

Another remedy is known as specific performance. In some situations, monetary damages will not make the non-breaching party whole. In these situations, the breaching party may need to just complete the service or project that they agreed to complete through the contract.

Contracts are important documents in California. People need to be able to rely on them and that is why if people breach the contact, it is important that they are fully compensated for their damages.

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