The terms of a contract are legally binding. It means that all the parties are obligated to fulfill and perform according to the contract terms. Not doing so amounts to a breach of contract, which is defined as the failure to live by all the contract agreements without legal excuse.
There are several remedies for such contract breaches, depending on what the aggrieved party (and the court) feels is appropriate. They include:
These are among the most popular types of damages. They are usually monetary and meant to compensate for the financial losses occasioned by the breach. Depending on the nature of losses suffered by the breach, compensatory damages can be consequential or general.
This is a specific, set amount of monetary damages (usually defined within the contract itself) for non-performance. It acts as both a deterrent against a breach and an automatic resolution if a breach does occur.
This type of remedy compels the party in breach of the contract to honor their obligations. It aims to correct the breach and is usually an option where monetary damages are not sufficient to cover everything.
Rescission discharges both parties from the obligations of the contract. Failure to perform as per the contract can be the basis for rescinding a contract, restoring both parties to the position they were in before getting into the contract.
These damages might be awarded to you if there was a breach of contract with no actual financial loss. In most cases, nominal damages serve to prove that you were right about the occurrence of the breach, but the actual compensation is virtually nil.
Sometimes, none of these remedies may be enough to compensate you or your business in the event of a breach of contract. However, staying in the know about your options and what steps to take in case of a breach can help you assert your rights.