Legal remedies available for breach of contract in business

1. Damages

This is the most common remedy.
The court orders the party who broke the contract to pay money to compensate for the loss caused.

Types of damages:

  • Ordinary (Compensatory) damages cover direct losses
  • Special damages cover losses known to both parties at the time of contract
  • Nominal damages small amount when no real loss is proved
  • Liquidated damages amount already fixed in the contract
  • Exemplary damages to punish (rare in contract law)

2. Specific Performance

The court orders the party to actually perform their promise instead of paying money.
Used when damages are not adequate (e.g., sale of land, rare goods).


3. Injunction

The court orders a party to stop doing something that breaches the contract.
Common in cases like breach of a negative clause (e.g., not working for a competitor).


4. Rescission

The injured party can cancel the contract and be freed from further obligations.
Both parties are restored to their original position as far as possible.


5. Restitution

The injured party can recover any benefit already given under the contract.


6. Quantum Meruit

Means as much as earned.
A party can claim payment for work already done when the contract is breached or becomes void.


7. Suit for Interest

The injured party can claim interest on money due under the contract

Requirements:

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