When New Jersey business owners create a contract, all parties hold responsibilities. If one party does not uphold theirs, this is a breach of contract. When this occurs, relief (“remedy”) is due to the party or parties that did not breach contract.
There are three primary types of remedy for a breach of contract. They are cancellation or restitution, damages and specific performance. Cancellation is simple. This means everyone decides to cancel the contract. All parties are free of their obligations. But what if a party chooses to sue for restitution? This puts the non-breaching party back into the position they were in pre-breach.
The most common way of handling a breach is by paying for damages. This can come in many forms, including:
- Punitive damages
- Compensatory damages
- Liquidated damages
- Nominal damages
Each type of payment is ideal for a different situation. For example, compensatory damages repay the non-breaching party. But if the court cannot prove this party lost money, they will award token nominal damages.
Finally, there is specific performance. This is for unique cases where damages do not suffice. Under this, the court orders the breaching party to perform their contractual obligations. If damages alone will not make up for losses, courts will order for specific performance.
Do you wish to keep reading about contract disputes, breaches of contract and more? You can follow the link here to our web page on business law. Learn more about how contract disputes occur and what to do to solve them. You can also learn tips on avoiding these disputes or alternative methods of handling them.