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Common Legal Remedies for Breach of Contract

Business contracts are vital for doing business. A business contract is a legally binding agreement between two or more parties outlining the terms and conditions under which they will do business. Contracts help each party understand their rights and obligations. Some common types of business contracts include sale contracts, partnership agreements, service contracts, employment contracts, lease agreements, and joint venture agreements. In an ideal business world, all the parties to a business contract would do what is expected of them, and there would be no problems. However, the reality is that parties to a business contract sometimes do not do what is expected of them. In the legal world, this is called a “breach.” When a breach of contract occurs, the non-breaching party can seek legal remedies to address the harm or losses suffered as a result of the breach. The specific remedies available depend on various factors, such as the terms of the contract, the nature of the breach, and the applicable laws. That said, below are some of the common legal remedies for breach of contract.


The most common remedies people seek after a breach of contract are damages. After a party breaches the terms and conditions of a business contract, the non-breaching party may be entitled to monetary compensation to cover the harm or losses suffered because of the breach. There are several types of damages that can be awarded in a breach of contract case, including the following;

  • Compensatory damages: The damages put the ‘innocent’ party back to the position they would have been in had the breach not occurred. They compensate for actual economic losses suffered as a result of the breach.
  • Punitive damages: These damages are awarded to punish the breaching party for egregious or harmful conduct. However, these damages are rarely awarded in breach of contract cases.
  • Liquidated damages: These damages are expressly provided for in the contract in the event of a breach.
  • Nominal damages: This is a small amount of money awarded to the non-breaching party when no substantial loss has been suffered.
Specific Performance

Specific performance may be a legal remedy in some situations. This legal remedy is often available in cases where monetary compensation is insufficient and the subject matter of the contract is unique. With this remedy, the court orders the breaching party to fulfill its contractual obligations as specified in the contract.


The court may order the breaching party to refrain from taking certain actions or to perform a specific act. This is called an injunction. For example, an injunction may prevent the breaching party from violating specific contract terms or force them to fulfill their contractual obligations.

Rescission and Restitution

Rescission is when the contract is canceled, and the parties are restored to their pre-contractual positions. With rescission, it is like the contract never existed. This remedy is available if the breach is material. The non-breaching party may seek restitution and cancellation if they have given a benefit to the breaching party. This puts the non-breaching party back in the situation they were in before the breach and terminates the contract.

Contact Silicon Valley Business Attorneys at SAC Attorneys

To learn more about the legal remedies for breach of contract or if you need help with a breach of contract case, contact our skilled business attorneys at SAC Attorneys LLP.

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