A plaintiff who is successful in a breach of contract dispute or claim is entitled to compensatory damages for such losses that arise naturally from the defendant’s breach of contract. Alternatively, a successful plaintiff may be entitled to damages that the parties may have been contemplated by both parties when contracting.
The overriding premise of compensatory damages for breach of contract are designed to place the injured party in as good a monetary position, as he/she would have enjoyed if the contract had been performed as promised. This becomes difficult in that it required the court to ask if the breach had not occurred what would the plaintiff’s financial standing have been or what amount of money damages will adequately restore the plaintiff to their status before the contract. This can present difficulty, particularly when the expected benefits from a contract are hard to reduce to dollars and cents. Therefore, courts are granted some level of flexibility when attempting to resolve these issues given its ambiguity.
Although not a form of monetary compensation a party who sues for a breach of contract may have a court order a party to do something or to refrain from doing something to remedy the breach of contract.
Liquidated damages are included in a contract as a predetermined amount of damages that may be assessed if the contract is breached. Courts will generally allow liquidated damages if the amount is a reasonable amount of compensation.
Nominal Damages for a Breach of Contract Dispute
When a breach occurs with no actual monetary damages, this would allow the Plaintiff to receive a small, nominal amount of compensation.
These types of damages are rarely awarded and are available only when the breaching party engages in some type of willful and malicious conduct.
Limits on Contract Damages
Further complicating the process, courts must also abide by the fact that not all losses will be recoverable. A plaintiff’s recovery will be limited when damages become too remote in order to have a logical connection to the injury suffered by the plaintiff. When claimed losses are too remote or unforeseeable, there can be no recovery. This can be both a question of fact and a question of law. Further, a party who fails to mitigate their damages may have their recovery limited based on the idea that the law only helps those who help themselves. Therefore, one cannot engage in conduct that makes their position much worse effectively compounding the injury.