A breach of contract lawsuit can result in significant financial losses for a company, as well as reputational harm, and other damages that are difficult to quantify. Fortunately, a wide variety of damages are available to an aggrieved party who prevails in a breach of contract lawsuit. Depending upon the specific facts and circumstances of the case — and the terms of the contract — remedies can include compensatory damages, specific performance of the contract, liquidated damages, consequential damages, restitution, and rescission.
Compensatory damages, also known as money damages, are one of the most common remedies sought in a breach of contract lawsuit case. This form of damages typically equals what the plaintiff would have received if the other party had not breached the contract. Lost profits can also be awarded if they can be estimated with reasonable certainty.
Specific performance may be ordered by a court in a breach of contract case. This means a judge would order the breaching party to carry out the terms of the contract and perform what they had agreed. This remedy works best in cases where the goods or services are unique, and an award of money damages would be inadequate.
Many contracts contain a liquidated damages clause that specifies the non-breaching party’s remedy if one of the parties breaches the terms of the contract. In other words, liquidated damages are a predetermined amount of money that must be paid by the breaching party for failure to perform under the contract.
Consequential damages are those that cover any loss incurred because of the breach of contract due to conditions that are not ordinarily predictable, including indirect damages. Also known as special damages, this remedy is less common than compensatory damages, but can be awarded in appropriate situations.
When restitution is awarded in a breach of contract case, the non-breaching party is restored to the position they were in prior to the breach. Not to be confused with an award of compensatory damages, restitution does not include compensation for lost profits or other monetary losses caused by a breach. Rather, an award of restitution focuses on the benefit the defendant received at the expense of the plaintiff and prevents unjust enrichment. Restitution is commonly sought when a contract is entered into as a result of fraud, coercion, undue influence or mistake. It is also a remedy in cases where a contract was voided due to a defendant’s incapacity or incompetence.
Rescission is an equitable remedy that is used in breach of contract cases. This remedy allows for the termination of a contract entered into as a result of misrepresentation, fraud, or any action by the defendant that might constitute undue influence or unconscionability. It can also be used in cases where the legality of the bargain is called into question.
Punitive damages are rarely awarded in breach of contract cases in Illinois. Typically, they are only available in cases involving malice, wantonness, and oppression. This form of damages is not meant to compensate a plaintiff for their losses — they are meant to punish the wrongdoer and deter others from engaging in similar conduct.
Similar to specific performance, an injunction is a commonly sought remedy in breach of contract cases. Once an injunction is issued, the breaching party is ordered to do something — or refrain from taking a particular action. An injunction may be a permanent or temporary remedy. For instance, an injunction may be ordered at the outset of a case, pending the outcome of the matter. A permanent injunction may be issued as part of the judge’s final ruling in the lawsuit.
Importantly, to be granted injunctive relief, a party will generally be required to show that there is a substantial likelihood of irreparable injury if the injunction is not issued. They must also demonstrate that the injuries suffered would outweigh any losses the other party would experience due to the injunction.
A breach of contract can cause your business to suffer significant financial harm. If you have entered into a contract with a party who refuses to uphold their end of the bargain, it’s important to have a skilled attorney by your side who can fight for your rights. Located in Rolling Meadows, Litico Law Group is dedicated to serving the legal needs of business owners in Illinois for a wide variety of matters, including those involving breaches of contract. We welcome you to contact us by filling out our online form or calling (847) 307-5942 to schedule a consultation to learn how we can assist you with achieving your business objectives.