Remedies for Breach of
Contract
pages 210-214
By Lauren Conroy
Remedies for Breach of Contract
• The law divides breaches of contract into two
categories: the major breach and the minor breach.
• Different remedies are granted for injuries caused by
minor and major breaches
• Remedy: action or procedure followed to enforce a
right or to compensate for an injury
Basic Remedies for Major Breach
1. Rescission and restitution- cancelling the contract
and returning whatever has been received under it.
2. Money damages- the payment of money to
compensate for injury.
3. Specific performance- a court order commanding the
breaching party to perform what was promised in the
contract.
Minor Breaches
• The party injured by a minor breach must generally
continue to perform the duties defined by the contract
• Only remedy generally available is money damages
• Offset: deducting the cost of completing or fixing a
minor breach from payment of the contract price to
the breaching party
Rescission and Restitution
• Restitution permits the injured party to
recover money or property
• When rescission is granted, all the contractual
obligations of the parties are extinguished
Types of Money Damages
• Compensatory: seeks to place injured parties in
the same financial position they would have
been in if there was no breach
• Consequential: the court tries to place injured
parties in the same financial position they would
have been in if the contract was performed
Types of Money Damages
• Liquidated: damages agreed upon before a
possible breach of contract
• Punitive: the purpose is to punish and make an
example of the defendant (occurs when there is
an intentional tort)
• Nominal: small amount of award money when
no injury has occurred
Remedies for Breach of Contract
• Money damages are not always an adequate
remedy for breach of contract
• Decree for Specific Performance: the court
orders the defendant to do exactly what was
promised in the contract.