What Can You Do If Contract Is Breached?

 

By Albert L. Kelley

 

We already have covered monetary damages, but there are other remedies to a breach of contract.

 

Recession

 

Rather than a lawsuit for damages, there may be a suit for recession. Recession is where you ask the court to reverse the contract. This occurs when there is a material breach such that the contract should not be enforced. If a party has paid money toward this contract, they can ask to have the money returned. If the parties cannot be restored to their original position, recession cannot be granted, as it must fully reverse the contract.

 

 

Specific performance

 

If one party has fully performed its obligations under the contract, it can file an action for specific performance. This asks the court to order the other party to perform its portion of the agreement. This is a rare remedy, because the courts don’t favor ordering people to do things. Usually, it is only allowed when the issue is unique, and money damages don’t provide sufficient remedy. An example is a contract to purchase land. Land is always considered unique and, therefore, if a buyer comes forward ready to buy, he can ask the court to order the seller to comply with the purchase and sale agreement. If the contract is to sell something rare or something where the sale is rare, specific performance can be ordered. Consider the sale of an airliner like a Boeing 747. This is not a rare item, but the sale is fairly rare.

 

 

Injunction

 

This is an order by the court either preventing or requiring a party to do an act. If the contract states that the person is not to take a certain action, an injunction is the proper remedy.

 

 

Liquidated damages

 

A contract may contain a clause that guarantees a specific amount to be paid as a liquidated damage in the event of a breach. Liquidated damages are allowed when actual damages cannot be readily discerned. The amount of the liquidated damage must not be excessive. If it is too large, the court may look at it as a penalty, and it will not be allowed.

 

 

Specific clauses

 

You can add clauses to your contract that limit damages. Many common carriers will do this. When you ship a package with a major carrier such as FedEx or UPS, the contract will usually have a line that says essentially “Unless the value of the property is stated, the liability of the carrier is limited to the amount of postage.”

 

 

You can also put a clause stating that the party breaching the agreement will not be liable for the breach. This is not favored by the court and must be clear and unambiguous to be enforced.

 

 

Attorney fees

 

Finally, and what most people are interested in, are attorney fees. Attorney fees are generally not considered damages in a contract action, and unless stated in the contract will not be awarded.

 

 

Al Kelley is a Florida business law attorney located in Key West and previously taught business law, personnel law and labor law at St. Leo University. He is the author of “Basics of Business Law” (Absolutely Amazing e-Books). This article is being offered as a public service and is not intended to provide specific legal advice. If you have any questions about legal issues, you should confer with a licensed Florida attorney.

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