Can you recover damages from contract breaches?

| Jan 4, 2023 | Business Litigation |

Contracts are a normal part of doing business with other people and companies. These legally binding documents ensure that one party carries out its tasks or duties and gains compensation accordingly.

Failure by one party to uphold a contract may result in a breach of contract, however. If something like this happens, it is possible to take legal action.

General damage awards

The Judicial Council of California Civil Jury Instructions discusses breach of contract cases, in which one party clearly violated a contract in some way. It also discusses the potential damages that a person or business may recover in a situation where they face a breached contract.

First, the court will usually award general damages. This will cover the financial losses caused directly by the contract breach itself. For example, if you paid for half an order of printed menus and did not receive any, the court would likely order the printer to pay reimbursement.

Special damage awards

In some cases, it is also possible for the court to award a party with special damages. This includes loss of revenue or assets due to the breach of contract, but in a more indirect way.

For example, the breached contract may have slowed down production and lost a company some important business. A business’ reputation may suffer due to slowed, delayed or unexpectedly canceled projects, too.

However, mental suffering or emotional distress damages do not often get doled out in these cases. But it is still possible to obtain these other damages, which can help a good deal financially speaking.

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