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What are the types of breach of contract remedies?

On Behalf of | Jan 12, 2022 | Business & Commercial Litigation

Anyone running a business in Massachusetts knows that contracts are essential to doing business. However, contracts often aren’t fulfilled. Whenever this happens, failure to fulfill the terms of a contract is called a breach. When breaches have far-reaching consequences, you can several ways to remedy the situation.

Types of breach of contract remedies

Under business litigation rules, companies can pursue two types of remedies for breach of contract: remedies in law and remedies in equity. Remedies in law can take six different forms:

  • Compensatory damages, where the plaintiff receives money when you have to go elsewhere for s service
  • Restitution, a payment equal to the cost of the services
  • Punitive damages, punishment usually reserved for reprehensible acts
  • Nominal damages, awarded when neither party suffers harm
  • Liquidated damages, when parties agree to a specific amount
  • Quantum meruit, when the court awards one party what they feel the service was worth

Remedies in equity occur when the court orders one party to perform an action to remedy the breach of contract. This remedy is also called injunctive relief, and either occurs as a cancellation, indicating the parties are no longer bound by the contract, or specific performance, where a judge orders a party to deliver the goods or perform a service.

Protecting your business interests

Whenever a possible breach of contract occurs, you need to protect your business interests. If you have been accused of a breach, you should attempt to do everything possible to prove that you were not at fault or that a breach did not occur.

Explore your options before heading to court. In some instances, you may be able to reach an equitable settlement.