Remedies for Breach of Contract

21 January 2011 A breach of contract occurs where a party to a contract fails to fulfill the obligations in the terms incorporated into the contract. This can occur in many situations such as the failure to supply goods or perform a service as agreed. Remedies available for breach of contract are as follows: Damages The main remedy available to the innocent party in a breach of contract claim is damages. This is a monetary sum fixed by the court to compensate the injured party. It is the process in which damages are assessed and is designed to put the injured party in the same position they would have been in if the contract had been performed. There a two types of damages: (1) Liquidated damages; and (2) unliquidated damages.
Liquated damages

A liquidated damage is described as 'monetary compensation for a loss, detriment or injury to a person's rights or property awarded by a court judgment or by a contract stipulation regarding breach of contract. ' Usually parties to a contract may agree to incorporate a set amount that would be paid in the event of a breach of contract; this clause is referred to as a liquidated damages clause and is enforceable by law. Under these circumstances the courts are not required to asses or calculate losses sustained by the party.
Unliquidated damages

Unliquidated damages are assessed by the courts in order to recover any loss incurred by the claimant in relation to harm or damages caused to them or their property arising from breach of contract. The remedy is not designed to put the claimant in a better position than they would have been if the breach had not occurred. In order to recover losses arising out of different situations there are three ways in which unliquidated damages are calculated. Expectation loss - the innocent party seeks to recover profits which he expected to receive had the contract been performed; he is entitled to damages for loss of bargain. Reliance - compensates the innocent party for expenses sustained and losses incurred in reliance on the contract. Restitution (defendant must have unjustly enriched at the expense of the claimant) - seeks to reverse that unjust enrichment, by restoring the relevant benefit of enrichment to the claimant.

Other remedies are available to a claimant if damages are not an adequate means of compensating them. These are known as equitable remedies: (1) Specific performance; and (2) Injunction.
Specific Performance

Specific performance is the remedy which allows the courts to order the party in breach of the contract to perform their contractual obligations. This is used by courts when no other remedy such as one that holds monetary value will adequately compensate the other party.
Injunction

An injunction like specific performance is a form of remedy which is granted at the discretion of the courts if damages will not be adequate in compensating the claimant in relation to the damage caused. An injunction imposes an obligation on the party in breach of the contract to refrain from doing something.

Remedies for Breach of Contracts

Remedies for Breach of Contracts describes that in any situation in which there is a right, there is also a remedy and a contract gives rise to correlative rights and obligation remedy is the means given by the law for enforcement of a right. Remedies for Breach of Contracts Remedies for Breach of Contracts include; Damages Quantum Meruit Specific Performance Injection Rescission Damages

Damages as one of the Remedies for Breach of Contracts are monetary compensation allowed to the injured party of the loss for the injures suffered by him or her as a result of the breach of contract. The fundamental principal is compensation and not punishment. The aim is to put the injured party in the same person he would have been had their been performance. As general rule compensation must be commensurate with the injury or loss sustained arising naturally from the breach if actual loss is not proved, no damages will be awarded. Damages can occur in as liquidated damages where whatever is awarded is commensurate with the damage penalty estimated and the rewards are in excess a person injured by a breach of contract is under duty of mitigate and that is to say he must take seasonable steps to reduce incidence of loss arising from a breach of contract the plaintiff cant clam damages of loss which is attributable to his failure to mitigate. Quantum Meruit Quantum Meruit is another of the Remedies for Breach of Contracts. It refers to as much as has been done. These may be available to ether parties without claiming damages or compensation for work done it can also be done by claiming reasonable compensations Specific Performance One of the Remedies for Breach of Contracts is special performance. It means carrying out the contract as agreed. It is an equitable remedy and it may be granted where monetary compensation is not adequate relief, where there is no standard for asserting the actual damage and where it is probable that the compensation in money cant be gotten. Injection Injection is another of the Remedies for Breach of Contracts. It is a court order restraining a person from doing a particular act. Rescission The last but not least of the Remedies for Breach of Contracts is rescission. It occurs when the aggrieved party decides not to perform his part of the contract. He may even sue and be granted rescission by the court in which case he becomes entitled to compensation for any damage which he has sustained through non-fulfillment of the contract. Business Training in Kenya has more information on this. Conclusion on Remedies for Breach of Contracts As seen above the five ways to for Remedies for Breach of Contracts are; Damages, Quantum Meruit, Specific Performance, Injection and Rescission.