Types Of Compensations Available For Breach Of Contract

A contract is defined as an agreement between two or more than two beneficiaries. It is used to define the rules that all the beneficiaries have to follow. In case any beneficiary fails to follow the terms and conditions of the contract then the other beneficiary becomes entitled to compensation. This compensation is decided according to the loss of the beneficiary.

Here breach of the contract term is used to refer to this kind of condition. The type of compensation or remedy is decided by the severity of the contract. For example in case the damage is very small then there can be monetary compensation and contract modification. However, if the damage is high then mutually the decision is taken.

Damages are referred to as the money awarded to the beneficiary, suffered the loss. In the legal system, there are different types of remedies. Some of them are discussed below.

 * Compensatory damages: Compensatory damage is a type of remedy used to compensate           the non-breaching beneficiary for the losses. It is the most common remedy used in breach of        contract cases. For example, suppose the first beneficiary has to provide a particular service          according to the contract. But unfortunately, the Professionals are unable to provide the service and the second party has to look for a third beneficiary for the services. Now the new beneficiary asks for $1,000 extra for the services. Here the second beneficiary can file the lawsuit against the first one. Here the first beneficiary has to compensate the second beneficiary by paying $1,000.

* Restitution: The main motive of the restitution is to restore the injured beneficiary in the initial position. Initial position means the position of the beneficiary before the losses.

For example, suppose the first beneficiary breaks the contract before the second beneficiary. In the case of restitution, the first beneficiary has to return the advance money paid by the second beneficiary. Employment law firms like Shegerian Conniff can help the beneficiary in recovering the damages.

* Liquidated damages: In some of the contracts, the compensation is already decided in case there is a contract breach. This type of compensation is called liquidated damages.

* Nominal damages: When there is no real harm in case of breach of contract then nominal damages are awarded. Since the nominal damages can be very small, the winning beneficiaries often consider them as a sign of victory against losing beneficiaries. Here the compensation can be as low as $10 or even $1.

Here instead of filing the lawsuit immediately, the beneficiary faced loss should consult Shegerian Conniff. That's because the free initial consultation from attorneys can help a lot in deciding whether the lawsuit should be filed or not.