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Four Types of Damages Available in a Breach of Contract Compensatory damages. Compensatory damages aim to restore the party who did NOT breach the contract back to the position they would have been in if the other party had held up their end of the deal as promised. Punitive damages. ... Nominal damages. ... Liquidated damages.
What Is Required to Prove Compensatory Damages? Causation: The defendant's breach must be the reason for the plaintiff's economic losses. ... Foreseeability: The losses must be foreseeable at the time of contract formation. ... Calculable: The losses must be quantifiable and able to be calculated into specific monetary amounts.
Damages are usually awarded to an injured party for losses suffered as a result of the defaulting party's actions or non-actions. The purpose of an award of damages for breach of contract is to put the injured party in the position it would have been in had the contract been performed.
If one party fails to perform their obligations under an agreement without a reasonable excuse, the other party may be able to sue them for breach of contract. To do this, the contract must be valid?it must be legal and both parties must have the capacity to enter into it.
As a general rule, contractual damages are available through legal action in English law if one of the contracting parties has broken a term of that contract. The breach of contractual obligations must have caused a loss, primarily financial.
In a contract case, punitive damages are generally not awarded. This is because the law generally recognizes that parties should be allowed to breach a contract where it would be more economically efficient to do so.
The most common remedy is damages, where the court determines the damage that the breach of contract caused, and directs the party who breached the contract to pay a sum of money. In some circumstances, the court will make an order for specific performance.