Section 1 Contracts
Section 2 Federal Securities Acts
Section 3 Secured Transactions
Section 4 Bankruptcy
Section 5 Debtor-Creditor Relationships
Section 6 Agency
Section 7 Regulation of Employment
Section 8 Business Structure
Section 9 Professional and Legal Responsibilities
Section 10 Individual taxation
Section 11 Corporate Taxation
Section 12 Partnership Taxation
Section 13 Transactions in Property
Section 14 Gift and Estate Tax, Trusts And Exempt Organizations, Other Taxation Topics

1.8 Remedies for Breach of Contract

There are several potential remedies for breach of contract.

  1. The injured party can sue for monetary damages. This remedy is often called compensatory damages. It is the most common remedy under contract law.


  1. The injured party can sue for specific performance. This remedy would apply whenever the subject matter is unique such as a land sale.


For example, assume a developer contracts to buy three parcels of land adjacent to each other from three separate sellers.  The owner of the middle parcel reneges.  The developer would ask for specific performance since the other two parcels would have no value without the one in the middle. Specific performance compels compliance with the contract. One may not, however, sue for specific performance to compel personal services. Also, one may not sue for both compensatory damages and specific performance.


  1. A contract can call for liquidated damages, and as long as the calculation is reasonable, the courts would uphold them. An example would be a deposit of $500 against a contract to print wedding invitations which is subject to forfeit if the customer cancels the order.


  1. Punitive damages are usually not permitted under contract law.


  1. Rescission is also a potential remedy. Courts will resort to rescission in cases where it cannot be determined which party is at fault. The contract is cancelled and the parties are placed in the position they were in before the contract was formed.

Any party injured as a result of a breach of contract must take reasonable care to minimize loss.  The courts will not award costs that could have been avoided. The duty to minimize losses is referred to as mitigation of damages.

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