Breach of Contract

A breach of contract occurs when one party to a contract fails to fulfill the terms of the agreement and has no legal excuse for failing to act. The other party then has the right to seek a remedy in the courts. There are four legal remedies for breach of contract:

1. Payment of damages: Money awarded to the party who was harmed by the breach of contract, to cover losses incurred because the contract wasn’t fulfilled. Suppose a tree branch fell and caused a hole in the roof of your house. You find a roofer who has immediate availability and sign a contract with them to fix your roof in two days starting tomorrow. The roofer doesn’t show up and won’t return your messages. A few days later, a huge storm happens and because of the hole in your roof, you now have water damage that will cost $5000 to fix. You can sue for the cost of the water damage because the roofer breached the contract.
2. Specific performance: A court order requiring the breaching party to perform the duties under the terms of the contract. For this remedy, you would sue and ask the court to order the roofer to fix the roof at the same price and conditions in the contract.
3. Restitution: Canceling the contract and returning to the situation that existed before the contract. If one party fails to perform under the contract, neither party has any further obligation to the other. Because the roofer didn’t do any work, you would not owe any money under this remedy. However, if you gave the roofer a deposit or advance payment, they must return it to you.