What compensation can you pursue in a breach of contract case?

Drafting a sound contract for everything from a partnership agreement to a commercial lease to a licensing agreement can be critical for your business. However, even the strongest of contracts can fail to prevent a violation that forces your business to take legal action.

A breach of contract can lead to serious financial, operational and logistical setbacks for your Portland business. In such cases, Oregon business owners can seek remedies for the breach in court to correct the damage incurred from the breaching party. There are four main categories of damages or compensation to correct the breach, including:

Compensatory damages

As the name suggests, these damages aim to provide relief in the form of financial compensation to the injured party in the dispute. One of the more common remedies in a breach of contract dispute, this results in the court ordering the party that breached the contract to pay you to sufficiently obtain the services originally promised in your contract.

Punitive damages

While compensatory damages seek to financially compensate the injured party, punitive damages seek to punish the offending party. Courts rarely award punitive damages yet may order them in cases where the injured party suffered immense harm due to the broken contract. Intended to discourage the offending party from repeating their actions, the breaching party then makes these payments to the injured party.

Nominal damages

When a breach occurs but neither party suffers financial harm from it, the court may award nominal damages. Commonly referred to as “token” damages, the court may award the party on the receiving end of the broken contract damages of one dollar or another token amount to resolve the case.

Liquidated damages

In some contracts, the parties may have already determined how damages would be awarded in the event of a future breach of contract. In such cases, the contract may state the amount of damages that the injured party will receive. The court will then award these damages.

Depending on the specifics of your case, you may have additional options to remedy the breach of contract other than through pursuing compensation. Your attorney can advise from the start of your case on remedies to pursue to aid your business and compensate it for its loss.

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