When you enter into a contract with another party, you expect that party to hold up his or her obligations. For example, if you own a medical practice in San Diego and you contract with a specific vendor to provide medical supplies, you expect that vendor to deliver on every one of your orders. If the vendor fails to deliver the products on time, does not deliver the correct products, or fails to honor the contract in any other way, then it is a breach of contract.
When you find yourself in the position where a breach of contract has occurred, you may be trying to find a solution to the problem. Some businesses opt to work through the issues using various dispute resolutions, such as mediation or arbitration. In some cases, the only option is to file a lawsuit in court. Read further to find out more about settling a breach of contract.
Measure of damages
In general, contracts usually contain provisions that specify an exchange of goods or services in return for payment, either in cash or something else that is valuable. To continue the above example, when you ordered medical supplies, you paid for the complete order as well as an addition fee for expedited delivery. If the vendor did not deliver your order, then the damages are the amount you paid for the order and possibly any other financial losses you suffered because you did not receive the order.
In some cases, a party will cancel a contract before the work is complete. If this happens, it is also a breach because neither party has totally followed through on the terms. For instance, if you placed an order for medical supplies and made a down payment but then canceled the order after only receiving a part of it, then neither you or the vendor are entitled to receive the total value of the original contract. Instead, you would only pay for the goods received. If the value of these goods are less than the down payment, then the vendor may owe you.
Some contracts include clauses that specify the damages each is responsible for in case of a breach. These clauses typically exist to reduce the risk of a breach by creating the terms of a damage award. However, if your contract includes punitive damages, the court may not enforce that part of the contract because it is usually a sign that the parties were not on equal footing during the contract negotiations.
If you find yourself in a position where you have suffered losses due to a breach of contract, you might be entitled to damages. You may be able to reach an agreement through mediation or you might need to file a lawsuit in court in order to recover your losses.