Imagine that you have been running a small medical practice for many years. During this time, you have used the same vendor for you office's medical supplies. Recently, your orders have contained mistakes. At first, the mistakes were minor, but they have slowly gotten worse during the last few months. The last order arrived more than a week late and only contained half of the supplies you needed. The new representative that you have been dealing with has not taken any steps to correct the problems.
When a vendor does not follow through on your order, you might be able to take legal action for breach of contract. If you have entered into a contract for goods or services and the other party has failed to deliver, a business law attorney in the San Diego area can help you recover your losses. Read further for what you should know about breach of contract laws.
Breach of contract
In general, a breach of contract occurs when one party fails to fulfill obligations included in an explicit or implicit contract. This might mean that an entity does not provide the contracted goods or services on time or violates another part of the contract. Usually, the court will classify a breach as material or immaterial. This classification will play a role in the court's decision regarding a damages award.
After a breach of contract occurs, you and the other party might come to an agreement to complete the contract or you might choose to pursue the matter in court. If you and the other party cannot work out a solution, it might be time to file a lawsuit.
There are three main types of remedies that breach of contract victims usually pursue: Damages, specific performance, and cancellation and restitution. Damages might include compensation in the form of a reimbursement of any amounts paid as part of the contract. They might also include punitive damages, but these are rare. Two other kinds of damages are nominal damages and liquidated damages. The court might award nominal damages if you did not lose any money due to the breach. Liquidated damages are part of the original contract, which you have the option to enforce in case of a breach.
If damages are not enough to cover your loss, the court might order the violator to fulfill the terms of the contract. This is known as specific performance. As the non-breaching party, you also have the option to cancel the contract and sue to recover any money you previously paid to the other entity as part of the contract.
If you have suffered a breach of contract, you might be entitled to compensation for any losses your company sustained.