What Are My Rights If The Other Party Breaches A Contract?

Remedies for a breached contract can end up being confusing. Breaching of contracts means that one of the parties has failed to perform a “material” part of the contract.

Damages

This can include direct damages that instantly stem from the breach as well as the possibility for indirect “special damages,” this is then broken into “consequential” and “incidental” damages. Consequential damages are considered indirect losses to the party that flows from the breach, such as damages to a person, damage to other properties, lost customers, lost use, or lost profits.

Consequential damages must be a generally known or fairly foreseeable result of a breached contract, if an item of claimed consequential damages is very far fetched, it will most likely not be awarded. In the instance of a “non-material” breach, the party who has breached the contract may be responsible for damages.

Can A Contract Be Rescinded? 

The concept in which the non-breaching party essentially requests to undo and terminate the contract as if it never was to exist is called rescission. A party that wishes to rescind a contract to have proof that the breach was material.

Once that is provided and the rescission is requested, the court then attempts to place both parties back in the position that they were in prior to the contract being created. The rescinding party can’t seek any additional monetary damages that was suffered as a result of the breaching.

To get additional monetary damages, the non-breaching party must declare the existence of the contract, leave the parties responsibilities and rights as they are standing, and look to add up the additional damages suffered monetarily.

Can Completion Of A Contract Be Enforced?

It is often wondered if a non-breaching party can force the breaching party to appropriately perform whatever remains due under the contract terms. This is sometimes called “curing the default” or normally “specific performance,” and regularly this is denied because a court will not make a breaching party finish its performance.

However, both parties can agree to finish their performances to remedy a dispute but a court will not normally force the parties to do this. The court's solution is to award damages monetarily. 

Can Any Action Be Required To Perform From The Non-Breaching Party?

A common issue that can occur is for the non-breaching party to “mitigate” its damages, or make an effort responsibly to lower the accumulation of any damages caused if possible. An example of this is a landlord's duty to attempt to find a new renter in place of the existing renter that has breached the lease and moves out of their unit early.

If the landlord is unable or just does not make an effort, a court can deny some of the lost rent damages that the landlord endured due to their own failure to alleviate their damages. 

The issue of a breached contract and its solutions that are in place in favor of the non-breaching party varies and can be complicated. It is best to speak with an attorney to help you find what solution is best for you if any contracts are ever breached.

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