Remedies for Breach of Contract

Jun 07

At the end of lecture the other day the professor added, with emphasis, that “Chapter 16 is very important┬áto the rest of the course“. The topic of the chapter is Remedies for Breach of Traditional and E-Contracts.

Performance and Breach

The chapter contains starts of with a discussion of performance and breach. It was interesting that a distinction was made between ‘complete’ and ‘substantial’ performance. In other words, if one party to a contract completes most of the terms, the contract may be substantially performed. This would give rise to a minor breach. In other words, the court or jury are likely to consider partial remedies that related to the minor breach, rather than treat it as a full breach. The spectrum of possibilities deviates from the black and white view often given to contracts.

Damages

There are various ways to look at damages. This range from very little to enormous and serve various purposes. A summary list of types of damages should include

  • Monetary damages
  • Compensatory damages
  • Consequential (or special) damages
  • Nominal damages (typically $1)
  • Liquidated damages (or penalty)

Mitigation of damages was new to me. It makes perfect sense, but I didn’t know it had been articulated in the law. Mitigation of damages suggests that the person not in breach of the contract has a responsibility to reduce the overall damages if possible.

For example, if I have a work contract with a term of three years and I’m laid off after one year, then I’m entitled to damages of pay equal to what I would have made during the remaining two years unless I find other employment equivalent to what I lost. Under mitigation of damages, I’m required to look for work to reduce the overall damages to the breaching party (my previous employer). If I don’t look for work, they may be able to get a reduction to the overall damages at court.

Remedies and Torts

The remainder of the chapter discusses remedies and torts related to contract law. Among remedies are garnishment of wages, compelling to perform, etc. Torts include intentional interference, covenants of good faith, etc. These play out much like you might expect.

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