Remedies for Breach of Contract Lawsuits

A breach of contract occurs when one of the parties in an existing agreement fails to honor his responsibilities or obligations for no valid reason. A contract may either be breached in whole or in part.

This act is commonly typified by the following ways:

• When one of the parties failed to perform as promised


• When a party hinders another from performing his tasks


• When one party has expressed his intention not to perform

Contracts may either be oral or written. But to be enforceable, a contract must be put into writing. A written contract is always binding and accessible to both parties. In addition, a written contract is a legal document that may be easily submitted for protection and scrutiny by law.

Statute of Fraud

Contracts are often subject to lawsuits and false claims. To guard against these, most states have created the statute of frauds. This law covers nearly all written contracts that can be protected. These include the following:

• Sales of real property


• Promissory letters to pay someone else's debt


• Transfer of property upon the death of the party performing the contract


• Property leases for more than one year


• Any contract that takes longer than one year to complete


• Contracts which involved certain amount of money, which amount is set by the state


• A contract that will go beyond the lifetime of the one performing the contract

Statute of Limitations

When suing for a breach of contract, you must also observe the statute of limitations in your state. Statutes of limitations are laws which set the deadline or the maximum period within which a person may file a lawsuit or a claim.

In California, for example, the limitation set for the filing of a lawsuit against breach of oral contract is 2 years while the deadline for breach of written contracts lawsuits is 4 years.

Adherence to this law is important. Otherwise, if a lawsuit or claim is not filed before the statutory deadline, your right to sue or file is barred. However with some exceptions, a statute of limitations may be extended beyond its deadline.

A party involved in this type of lawsuits has several choices for his remedies. If you are contemplating on filing a lawsuit, you must first consider applying the following remedies:

1. Compensatory Damages – This is a reimbursement for costs and often awarded to compensate for your loss


2. Consequential and Incidental Damages – This is money paid for losses in the breach with foreseeable causes. Foreseeable damages means that each party knew that there would be potential losses if there was a breach.


3. Attorney fees and Costs – This is only recoverable if the provision is expressly written in the contract.


4. Liquidated Damages – Often specified in a contract, these are damages payable in instances of fraud.


5. Specific Performance – This rare remedy is usually done through a court order requiring performance exactly as specified in the contract. This is often applicable in real estate transactions and other unique property.


6. Punitive Damages - This is money given to deter or prevent the person or party from repeated occurrences of a wrongdoing. Generally punitive damages in contract cases cannot be collected.


7. Rescission – One remedy is the cancellation of contract where both sides are excused from further performance and any money advanced is returned.


8. Reformation – Another remedy which involves changing the terms of the contract to reflect the actual intentions of both parties.

At any rate, when a business dispute, such as a breach of contract, arises, it always makes sense to first negotiate for a settlement. However, if the matter involves a substantial amount of money and you are unsure of any settlement, consulting with a lawyer would be a better option.