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What kinds of damages are available for breach of contract?

On Behalf of | Jul 21, 2023 | Business Law |

A breach of contract can leave the non-breaching party seriously damaged. Business in the Dallas-Fort Worth Metroplex revolves around contracts and the parties’ promises to fulfill their contractual obligations. Failure to live up to one of those promises can render the damaged party unable to do business. They might have to sue for compensation to regain what was lost.

Making you whole again

The plaintiff in a breach of contract lawsuit can seek several types of compensation for damages. The most important of these is compensatory damages, which seek to make the plaintiff financially “whole” again. The idea is to put the plaintiff in the same position (or as close to it as possible) as they would have been had the breach never occurred.

For example, say Company A, a clothing retailer, contracted with Company B to purchase 500 red T-shirts deliverable by April 30. But B’s shipment did not arrive until May 15, and instead of red, the shirts B sent were green. A was forced to buy the red shirts from another vendor at a 25 percent higher price. Due to this breach of contract, Company A suffered damages from having to pay more than originally agreed upon, and likely from the delay too. If they can prove that Company B breached the contract, A could pursue damages from them.

Punishing extreme behavior

In cases where the breach was malicious, willful or fraudulent, the plaintiff can also seek punitive damages. This is a special type of damages meant to punish the defendant for their behavior, not compensate the plaintiff for a specific harm they suffered. Punitive damages are rarely awarded.

Injunctive relief

In addition to compensation, you can ask the court for injunctive relief — essentially, a court order requiring the defendant to perform under the terms of the contract.

Part of a successful breach of contract lawsuit is deciding what your company needs out of it. Do you want the defendant to start honoring the contract again, or compensate you for your damages and walk away from the agreement? Your attorney can advise and help you develop a strategy in your business’s best interests.