Damages in Contract Disputes
Contract disputes generally occur when one party fails to deliver upon its promises in the agreement. Often businesses will seek to settle a dispute through mediation or arbitration, but if this fails litigation may be the only means of recovery of any loss. If your company is involved in a contract dispute, it is important to have a College Station business lawyer in your corner who has the knowledge and experience to help you recover damages.
Types of Damages Available in Contract Disputes
In Texas, any contract dispute for an amount that is less than $10,000 is handled in a small claims court. There are several types of remedies available, depending upon the type of breach: damages, specific performance and restitution. Specific performance involves a court decree that orders the breaching party to remedy the dispute by delivering upon their promise as per the contract. Restitution is ordered by the court to prevent the breaching party from undue gain.
The third remedy, the awarding of damages, can take a number of forms:
- Punitive Damages: These are imposed as a means of punishing the breaching party. Such damages may work as a deterrent from future breaches.
- Liquidation Damages: Many contracts have built-in provisions for the possibility of a breach.
- Nominative Damages: In some cases the injured party does not actually suffer any monetary loss, but the court wants to make a showing that the breach was inappropriate.
- Compensatory Damages: These are the most common damages to be sought in a breach of contract lawsuit. There must be some kind of verifiable monetary loss, as reflected in the type of compensatory damages. Expectation damages are calculated as profits that the company would have enjoyed had the breach not occurred. Consequential, or indirect damages, are for loss of profits other than those from contractual loss.
In some cases the court may order that a contract be cancelled and a new one created. The court may also call for a rewriting, or reformation of the contract.
Work with an Attorney if You Are Involved in a Business Contract Dispute
A contract dispute can prove very costly to the injured party. If your company has entered into a contract that is breached, it is in your best interests to hire a College Station business attorney. Call Peterson Law Group to arrange a consultation at 979-703-7014 or 936-337-4681.