A breach of contract occurs when a party in a contractual agreement fails to fulfill its obligations. This could be due to negligent performance, failure to act or perform and other specific acts or conducts. Any breach of contract that causes an assessable detriment gives the injured party a right to claim compensatory damages or seek other remedies.
However, according to California laws, no damages can be recovered for a breach of contract, which is not ascertainable in its nature and origin. This means that the injured party must establish that there was a contract that the defendant breached and the resulting damages from the defendant’s failure to meet their obligations. Below are the main remedies for a breach of contract in California.
Damages are one of the typical remedies in a breach of contract claim. They include:
- Compensatory damages: These damages are also known as “actual damages,” and they cover the loss the injured party incurred due to a breach of an obligation arising from the contract. Therefore, the amount awarded aims to replace the loss caused by the breach.
- Restitution: These damages aim to restore the non-breaching party to the same position they occupied before the contract was established.
- Punitive damages: The purpose of these damages is to punish the breaching party. Therefore, if found guilty, the defendant may be ordered to pay the plaintiff above and beyond the point that would fully compensate them.
- Nominal damages: These damages are offered as a small token to the non-breaching party when no actual money loss was proven after a breach of a contract.
- Liquidated damages: These damages are added in the contractual agreement, and they include the type of compensation offered in the event the contract is breached.
Remedies in equity
A remedy in equity occurs when a court orders a party in a contract to take a particular action. For example, in case of a breach of a contract, the court may cancel the contract and make a ruling that the parties involved are no longer bound to it.
The court may also order the breaching party to perform a specific service. This mainly occurs in providing goods and services when a party fails to deliver as agreed. In this case, the court may order the breaching party to deliver the goods or services, especially when the items involved are unique and no other remedy is available.