Contract [LEGAL] Remedies

Question 1

Contract [Legal] Remedies: Compensatory Damages - Expectation Damages

Answer 1

Expectation Damages: In contract cases, the plaintiff is usually entitled to her expectation damages– the damages required to put the plaintiff in the position she would have been had the contract been performed.

Question 2

Contract [Legal] Remedies: Compensatory Damages - Consequential Damages

Answer 2

Consequential Damages: Consequential damages provide compensation for losses over and above standard expectation damages. They result from the non-breaching party’s particular circumstances and often take the form of lost profits. Consequential damages can only be recovered if a reasonable person would have foreseen the damages as a probable result of a breach at the time the contract occurred.

Question 3

Contract [Legal] Remedies: Compensatory Damages - Incidental Damages

Answer 3

Incidental Damages: Incidental damages are reasonable expenses incurred by the non-breaching party due to the other party’s breach, such as securing alternate work.

Question 4

Contract [Legal] Remedies: Compensatory Damages - Reliance Damages

Answer 4

Reliance Damages: If expectation damages are too speculative, a plaintiff may elect to recover reliance damages instead. Reliance damages are designed to reward the plaintiff the cost of his performance; they put the plaintiff in the position he would have been in if the contract had never been formed.

Question 5

Contract [Legal] Remedies: Compensatory Damages - Nominal Damages

Answer 5

Nominal Damages: A plaintiff may recovery nominal damages when the defendant has committed a legal wrong but the plaintiff suffered no actual, monetary loss.

Question 6

Contract [Legal] Remedies: Compensatory Damages - Liquidated Damages

Answer 6

Liquidated Damages: Parties to a contract may elect to stipulate in advance the amount of damages that will be paid in the event of a breach in a liquidated damages clause. To be enforceable, damages for breach must have been difficult to estimate at the time the contract was formed, and the amount agreed upon must have been a reasonable forecast of compensatory damages in the event of the breach.