When you sign a contract with one or more other parties, the last thing you are thinking about is what happens if a breach of contract occurs. However, things do not always work out as planned, and you may face a situation in which a party breaches a contract with you while operating your business. You need to understand your rights and potential remedies when this situation occurs. An Arizona commercial litigation attorney at Provident Law® can help in this situation.
We have years of experience advising individuals and businesses of all sizes regarding their legal options when a party breaches a contract. We can assist your business in navigating contract disputes and working to reach the most effective and efficient resolution for all parties involved.
Damages for Breach of Contract
The most common remedy a party seeks for a breach of contract is damages, which is monetary compensation that the non-breaching party seeks from the breaching party. Damages can take different forms, including the following:
- Compensatory damages – These damages are designed to place the aggrieved party in the same position that they would be had all parties performed their obligations under the contract as agreed. The goal of compensatory damages is to make the party whole and compensate them for their losses due to the breach. Compensatory damages might include loss of income because of the breach of contract, loss of use, and/or legal fees and costs.
- Punitive damages- Generally, punitive damages, meant to punish the breaching party for misconduct, are not recoverable in a breach of contract case absent evidence of intentional and extremely malicious wrongdoing.
- Liquidated damages – Some contracts contain liquidated damages clauses, which provide for the payment of a set amount of damages should a party breach the contract.
Specific Performance
Another remedy for a breach of contract is specific performance, a form of equitable or non-monetary relief. A party requesting specific performance is asking for a court order for the breaching party to follow through with the contract terms as previously agreed. For instance, suppose a business contracts to buy a specific piece of commercial real estate to house its business. The seller then backs out of the deal and sells the real estate to someone else. In this case, the original buyer could sue and ask for specific performance or a court order for the seller to follow through in selling the real estate. Specific performance is appropriate under these circumstances because the real estate is unique, and, as a result, monetary damages will not adequately cure the breach of contract.
Cancellation / Rescission and Reformation
Another form of equitable relief is cancellation and rescission. This remedy aims to put the non-breaching party back in the same position they were in before entering into the contract. In other words, the court orders the contract canceled or voided. All parties are relieved of their obligations under the contract.
In contract reformation, a party asks the court to rewrite the contract terms due to a party’s breach of the contract.
Contact Us for Assistance with Your Business Partnership Disputes Today
The commercial litigation attorneys at Provident Law® have over 200 years of combined legal experience representing businesses in their daily legal issues and the unexpected contract disputes you may be facing. We are in the best position to help you handle all commercial disputes in a manner that is as beneficial to your business as possible. We aim to build a long-term relationship with you as we work together to proactively address and solve the most complex legal problems that your business may face. Contact a commercial litigation lawyer today by calling (480) 388-3343 or reach out to us online to set up a time to see what we can do for you.