What Can You Sue for Breach of Contract?

If a party to an agreement fails to fulfill its contractual obligation, it can be financially detrimental. You may consider a lawsuit and be rewarded with possible legal remedies.

There are important considerations that the law takes into consideration when calculating the appropriate amount of damages. In contrast, the law does not necessarily provide a formula for contract damages.

Can I Sue The Breaching Party?

Before you file a lawsuit for breach, you should first determine if you have a viable claim. A valid breach must contain the following elements:

• There is an enforceable agreement between the parties;

• The plaintiff carried out their contractual obligations;

• The defendant failed to fulfill their contractual obligations; and

• The plaintiff suffered losses as a result of the breach.

As the plaintiff, you should prove you suffered harm due to the breach. Lawyer, Shivan Alhussein will walk you through each element to determine whether you have a strong case.

What Sort of Damages May You Seek?

When suing the defendant for breach, you may demand consequential, incidental, compensatory, and liquidated damages. Also, the breaching party may be punished for punitive damages for their behavior only if the contract involves a tort, such as fraud or embezzlement.

Compensatory Damages

The goal of compensatory damages (known as “actual damages”) is to compensate the plaintiff. These damages cover the losses that directly stem from the breach and put the non-breaching party back to the position as though the breach had not occurred. Mostly, courts grant compensatory damages in breach of contract claims.

Consequential Damages

Consequential damages (also known as “special damages”) occur as an indirect, but reasonably foreseeable, result of the breach. An example of consequential damages is loss of profits.

Incidental Damages

Incidental damages are expenditures that the non-breaching party faces when attempting to minimize the losses from the breach. For instance, if the non-breaching party needs to purchase substitute services or goods and must pay a premium for the last-minute purchase, those are incidental losses.

Liquidated Damages

Some contracts have a liquidated damages provision, which specifies an agreed-upon amount in the event of a breach. This provision comes into play when the computation of damages is too difficult to calculate.

What is The Extent of The Breach?

The extent of the breach will factor into how much you can expect from the lawsuit because it will impact how much you lost. Consider the following service's severity levels of breach:

• Minor or impartial breach: a portion of the contract was carried out, but not the whole contract.

• Material or total breach: either the entire contract is unfulfilled or the unfulfilled portion is substantial enough that it prohibits the parties from continuing to work under the contract.

• Anticipatory breach: one party informs the other that they will not be able to carry out their obligation under the contract

Keep in mind that the breach must have caused you losses for you to seek damages.

How to Calculate Damages?

You are entitled to receive damages to your losses as a non-breaching party to a contract and the following considerations may apply:

• Damages shall compensate the non-breaching party for the harm or damage directly caused by the breach (i.e. compensatory damages);

• Damages must have been reasonably anticipated or foreseeable by the parties at the time of the contract (i.e. consequential damages);

• Damages must be proven by ascertainable measures; and

• Plaintiffs cannot recover more than they lost, meaning the damages may only restore the plaintiff to the position they would have been in had the contract been fulfilled.

Limitations on Award of Damages

Many states have no available cap on compensatory damage awards. However, you have a duty to mitigate damages, meaning you must minimize the number of damages to the extent reasonable. You will not be able to recover losses that you could have avoided.