Breach of Contract: Legal Remedies That Can Be Pursued

When two or more parties enter into a contractual agreement, they agree to abide by the terms of the contract, including understanding that breaching the contract could result in injury and losses. It is important that any individual entering into a contract seek the guidance of a legal professional before placing their signature on the document. Because the law allows for specific remedies if one party is injured due to a breach of contract, the financial implications of a contractual agreement can be significant.

Several legal remedies can be pursued if a contract is breached, so it is important that attorneys working on a breach of contract case understand each remedy and how it is applied under state law. The most common legal remedies are:

  • Compensatory Damages – Compensatory damages provide compensation to the injured party if a contract has been breached. In essence, compensatory damages are designed to return the injured party to a “whole” state.


  • Punitive Damages – Punitive damages focus on punishing the breaching party, rather than solely on compensating the injured party. Punitive damages are less common in contract cases, however, if fraud is an issue, they may be ordered as a deterrent.


  • Nominal Damages – Nominal damages are awarded to an injured party who has not suffered monetary losses, but who the judge feels should be rewarded for being on the right side of the breach. Nominal damages are less common in contract cases unless there is also a breach of tort law.


  • Restitution – Restitution is a remedy that may fall in both categories of legal and equitable remedies. The purpose of restitution is to “restore” the injured party to a whole state, as they were before the injury occurred. In contract disputes, restitution often demands the party having breached the contract to restore or compensate the injured party to the extent of the contract terms.

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