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Are there legal remedies for a broken contract?

For most businesses, well-written contracts form the basis of a successful organization. Unfortunately, businesses often have to deal with parties - other businesses, suppliers, vendors - who have broken a contract. Fortunately, the legal process is designed to allow for several remedies to be reached under the law.

But what are these remedies, and can they provide relief after a serious breach has occurred?

Typically, the main remedies for a breach of contract are damages, specific performance, or cancellation and restitution.

  • Damages: The payment of damages is the most common remedy for a breach of contract. The damages can be categorized several different ways such as compensatory damages, punitive damages, nominal damages or liquidated damages.
  • Specific performance: It is not uncommon for the subject matter of the agreement to be rare or unique. In these situations, damages might not be adequate to remedy the breach. The court might order one party to perform the specific duties outlined under the original contract.
  • Cancellation and restitution: In many instances, the non-breaching company might choose to simply cancel the contract and sue for restitution. In this two-step process, the original contract is voided and the breaching organization will be forced to pay back any money or benefits that the non-breaching company had initially provided.

While a breach of contract might damage an organization, there are legal remedies, or relief, available. In the hands of an experienced law firm, the proper remedy can be reached.

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