What is a Breach of Contract?

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This week, David Weigel explains what it means when there is a breach of contract.

What is a Breach of Contract?

A breach of contract is when one party to the contract fails to comply with the terms of the contract. This means a party has failed to do something they were obligated to do, or they are doing something they had undertaken not to do.

Benefit of the Bargain

Once it has been established that a breach of contract has occurred, the next step is to access if any damages are due to the non-breaching party. The damages to the non-breaching party are typically calculated on the basis of the benefit of the bargain. This is done by putting the non-breaching party back in the position they would have been in had the breach never occurred.

Other Damages

There are a number of other terms that could be included in the contract that can also impact damages. For example, there could be a liquidated damages clause in the contract that sets a fixed penalty amount that the non-breaching party will receive.

Other examples include awards of attorney fees if there is litigation in the case of a breach,  injunctive relief clauses in employment and non-compete clauses, or specific performance in Real Property cases.  Punitive damages are typically not awarded in contracts cases.

In conclusion, evaluating a breach of contract claim requires a full understanding of the contract in question and all of the provisions that can impact potential damages.

At Davis, Upton & Palumbo LLC, our attorneys represent clients in court proceedings, in contract negotiation and drafting. We strive to make sure all of your contract needs are handled properly. If you want to learn more about our Business/Cooperate Law services, click here or contact us today.

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