A breach of contract occurs when one legally bound party fails to abide by the terms of a valid agreement. The parties may settle the matter among themselves or through a lawsuit filed in an Ohio courtroom.
Types of breaches
There are different types of breaches and different levels of seriousness. A violation may occur in one of the following three circumstances:
- One party failed to meet a delivery deadline
- One party didn’t satisfy all the agreed-upon terms
- One party neglected to act at all
In addition, there are material and immaterial violations. A breach is a material offense if a customer receives the wrong item and immaterial if it arrives a day late. These things contribute to building a breach of contract case, and a judge will consider them all during a hearing.
Remedies for a breach of contract
If the parties concerned can’t resolve the issue, business law provides three ways to resolve the dilemma.
Award of damages
Awarding some form of payment is the most common solution in breach of contract lawsuits. This action occurs in one of the following four ways:
- Compensatory damages: The non-breaching party receives back whatever they contributed. It is as if the contract never existed.
- Punitive damages: This is additional compensation the non-breaching party receives along with the compensatory payment. The intent of this is to punish the breacher.
- Nominal damages: The court may grant a small amount of money to a non-breaching party without proof of monetary loss.
- Liquidated damages: This is the compensation stated in the contract as an adequate award for any breach of contract event.
Specific performance awards usually occur in land and priceless goods sales. In such cases, the judge may order the deal to proceed according to the contractual agreement.
Rescission and restitution
Rescission cancels the contract, and the judge declares it null and void. Restitution means the breacher returns any received goods.
Contracts are binding on all parties. Ensure that you understand them before signing.