When you have a contract with another party, one of the worst things that can happen is a breach of contract. A breach of contract has two forms, a material breach and a minor breach.
With a material breach, one party doesn’t complete their duty. As a result, the contract may not be reparable. This means that the party who suffers as a result of the breach has the opportunity to seek compensation through whatever means are allowed by the terms of the contract. Suing, arbitration, mediation or potentially trial could all be methods of resolving conflict.
Minor breaches sometimes occur as well. When they happen, they’re called immaterial breaches. Immaterial breaches don’t change the underlying contract, and the contract may stay in place. However, the party that didn’t breach the contract still has the right to sue for damages.
Usually, breaches of contract are resolved in mediation or through other means before a lawsuit is filed. Mediation can be beneficial since it reduces the time it takes to resolve the conflict and makes it easier to move forward.
What kinds of damages can you receive if you’re a victim of a breached contract?
If the contract is breached, you can sue for compensatory damages, nominal damages, liquidated damages and punitive damages. Compensatory damages pay for whatever damages necessary to “make you whole” or put you in the same financial position as prior to the breach. Punitive damages are awarded when wrongful acts cause a breach. Nominal damages can be awarded when there’s no obvious or measurable financial loss. Finally, liquidated damages may be assigned by provisions in your contract.