There are two types of remedies generally available for a breach of contract; damages and specific performance. The most common remedy is, of course, damages, whereby a court will determine the damage caused to the wronged party by the breach of contract, and will direct the party having breached the contract to pay it. In certain circumstances the courts will order a remedy of specific performance, which basically means the defaulting party will be forced to complete its obligations under the contract. This article will give you a bit of background on both these remedies.

Damages for Breach of Contract

There are a number of different types of damages, each of which has developed over centuries in the common law legal system. The main types are:

Compensatory Damages– these are the most common damages to be awarded upon the breach of contract. They are designed to compensated the party who has suffered due to the breach, and are paid from the party that has breached the contract to the party who suffered.

Nominal Damages– these can be awarded if the courts determine that although a contract was breached, no real damage was suffered, so only nominal damages (ie a very small cash sum), should be awarded).

Liquidated Damages – these are damages that are pre-agreed between two parties to a contract. The amount of liquidated damages will be set out in the contract, and upon the breach of contract the courts will not have to work out what compensatory damages can be awarded, they can just turn to the liquidated damages clause of the contract. It is important that the liquidated damages clause in a contract not be deemed “penalty” damage, or it will be invalid.

Specific Performance

In certain circumstances the courts will order specific performance of the terms of a contract even after it’s breach. This generally only occurs in relation to contracts dealing with real property, for instance if you’ve agreed to sell an apartment and then breach the contract by not going through with the sale, the remedy that the courts order may be that you complete the sale.

Conclusion

If you get to the stage where you’re looking at remedies for a breach of contract, you really need to start talking with a lawyer. Remedies are complex, and the information provided in this article is only a brief overview. Contact LegalVision on 1300 544 755 to speak with one of our skilled contract attorneys.

Lachlan McKnight

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