When one party faces a lawsuit in a breach of contract, they often remedy the situation by paying damages to the other party.

Courts may consider many types of damages. They include compensatory damages, liquidation damages, punitive damages, nominal damages and restitution.

Compensatory damages are damages for a monetary amount intended to compensate the non-breaching party for losses resulting from the breach. Expectation damages are compensatory damages that cover what the non-breaching party expected to receive from the contract. Consequential damages are meant to reimburse the non-breaching party for indirect damages. To receive these damages, the injuries must be a direct result of the breach and be foreseen to both parties as they entered the contract. They aim to put the non-breaching party in the same position they would have been in had there been no breach.

Punitive damages are meant to punish the offending party and deter that party from future breaches with parties. They are payments the breaching party must make above and beyond the point that would fully compensate the non-breaching party. They are not often awarded in contract cases, but are more likely to be available in fraud or tort cases.

Nominal damages are awarded when the non-breaching party does not incur a monetary loss, but are meant to show the winning party was in the right. These are less likely awarded in breach of contract cases, but more likely in tort cases that cross over.

Liquidation damages are damages specifically stated in the contract. They may be sought when damages are hard to foresee. They must be a fair estimate of what damages may be if there is a breach.

Although restitution is not technically legal damages, restitution may be awarded to prevent the breaching party from being able to unjustly profit.

If you have suffered a breach of contract or have been named in a breach of contract lawsuit, you want experienced business lawyers on your side to fight for your interests. Call Doumar Martin PLLC today for your free, initial consultation.