What are the Legal Remedies for the Breach of a Business Contract?
by Haris Quinta
Running a business encompasses various legal elements designed to protect your investment. One of which is a business contract. Most business owners assume that this is a simple piece of paper that spells out their obligations and those of the other party in the agreement. Thus, they opt to have a standard document that they can change time and again to match different activities. It does not, however, reflect one of the most critical elements of your business contract; the remedies for its breach.
Business litigation attorneys from Townsville-based law firms are nonetheless well-placed to assess the risk of contract breaches. This way, they can include the right clauses for the damages you can claim for it.
Here are the primary categories of damages you can claim when your business partner breaches a contract:
Consequential Damages
These are sometimes called special damages. They apply when there is no clear evidence that a party breached his/her contractual obligations, but you suffered a loss resulting from the action. If, for instance, your business could not operate owing to the late delivery of essential equipment, you can get consequential damages. This category of damages will, however, only apply if you can prove the foreseeable consequence of the contract’s breach.
Actual Damages
These are also called compensatory damages and can be categorized into general and special damages. Special damages cover the monetary loss you will suffer following a contract breach and generally include medical, transportation and equipment replacement and repair. General damages, on the other hand, are non-tangible and might include loss of your physical or mental wellbeing and suffering.
Anticipatory Damages
You spend considerable resources on advertising contracts and interviewing candidates. You can claim anticipatory damages if the parties you pick for your agreement declares that they have no intention of performing their obligation and duties. This means anticipatory damages are meant for the breach of a contract even before its commencement. Implied and express repudiation are the two types of anticipatory damages. In implied repudiation, the party will not expressly refuse to handle the contract, but their words and actions will indicate that. In express repudiation, the party will plainly refuse to handle the deal.
Liquidation Damages
These are explicitly stated in your contract and are agreed upon during the negotiation process. Though difficult to predict, you and the other party can agree on an estimate in case of a breach. Remember that courts will not be too willing to award liquidation damages if they think the agreed upon estimate in your contract is excessive, or biased. As such, you should aim to have the most reasonable estimate for your liquidation damages.
There is no guarantee that the person or company you choose to work with in different spheres of your business life will deliver even if you take time picking the ‘’best’’. Including the above damages in your business contract is essential for you to have a ‘’fall back’’ plan in case things do not work out as you envisioned. You should hence have an attorney look through each of your contracts to ensure your business does not suffer losses for a contract’s breach.