A Civil Litigator Focused On Efficient And Cost-Effective Solutions

Types of damages you can seek in a breach of contract case

On Behalf of | May 18, 2022 | Business & Commercial Litigation |

As a business owner, you rely on contracts made with vendors, other businesses, suppliers and buyers to keep your business running. So, if one of these parties fails to perform what you agreed to, you are put in a tight bind. If this problem is unresolved you may need to pursue a lawsuit. There are two basic types of damages you can seek: compensatory damages and, in rare cases, punitive damages.

Compensatory damages

Compensatory damages reimburse you for the loss you suffered due to the breach. They are meant to make you whole or replace the loss you suffered due to the breach. There are two types of compensatory damages.

One type of compensatory damages is general damages. This type covers direct losses and expenses incurred due to the breach. Compensatory damages are the most common type of compensation awarded in breach of contract cases.

Another type of compensatory damages is known as special damages. This type covers losses and expenses incurred due to the breach due that are not ordinarily predictable. That is, they are losses that are incurred in an indirect way. Basically, if you want to pursue compensatory damages you need to show the breaching party knew of the special circumstances at the time the contract was agreed upon.

Punitive damages

Punitive damages can be awarded in a breach of contract case, but they are rare. Punitive damages are meant to punish the breaching party or deter similar conduct in the future. The breaching party must have acted with will, malice or fraud.

Mitigation counts

It is important to note that even if you were harmed by a breach of contract, you have a duty to mitigate. This means you must reasonably minimize the harms you suffered. You cannot be compensated for losses you could have reasonably avoided or fixed following the breach. If you did nothing to mitigate the damages, your award in a lawsuit could be reduced.

Pursue what you are owed

If you are the victim of a breach of contract, you will likely want to pursue a lawsuit to recover what you are owed. This may mean pursuing compensatory damages or even punitive damages. As long as you mitigated damages incurred, you can seek what you need to be appropriately compensated for the harms you suffered.