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Different types of damages for breach of contract

On Behalf of | Apr 6, 2021 | Business Law And Litigation |

A breach of contract can cause significant damage to the non-breaching party who followed the terms of the contract they had with the party responsible for the breach. Businesses and business owners who have been harmed because of a breach of contract should be familiar with the different types of breach of contract damages.

Damages for breach of contract

There are several different types of damages that may be available in breach of contract situations including:

  • Compensatory damages: Compensatory damages may be referred to as actual damages and are intended to compensate the nonbreaching party for the losses they have suffered because of the breach of contract. There are two types of compensatory damages including general damages and special damages. General damages are damages that cover the losses directly caused by the breach of contract. Special damages, or consequential damages, are damages that occur as a consequence of the breach of contract.
  • Punitive damages: Punitive, or exemplary, damages are intended to punish. They are awarded to punish willful, malicious or fraudulent conduct. Punitive damages are not commonly awarded in breach of contract situations.

Additional remedies may be available in breach of contract situations depending on the circumstances including rescinding, or voiding, the contract or specific performance of the contract which is court-ordered performance of the contract by the breaching party.

It is helpful for businesses impacted by contract disputes to be familiar with the resources and remedies available to them. This includes how to respond to a breach of contract, the options available to them and the damages that may be available to address the harm suffered because of a breach of contract.


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