Lump sum compensation is a certain amount that the parties agree to in the contract as compensation for a breach. There are several remedies in case of breach of contract, such as. B award of damages, certain executions, withdrawal, restitution. In the case of courts of limited jurisdiction, the main remedy is the award of damages. Since the specific service and withdrawal are appropriate remedies that do not fall within the jurisdiction of the district courts, they are not covered in this tutorial. A certain service presupposes that the infringing party performs its part of the contract. This fair remedy is quite common in real estate contracts and land transactions, especially since each piece of land is considered unique. When multiple funds are available, the highest dollar amount is not necessarily the best to pursue. Also keep in mind that contract law is different from tort law. Contract law does not allow punitive damages (a sum of money intended to punish the defendant for wilful misconduct).
Punitive damages are only permitted under tort law, for example. B, only if embezzlement or fraud can be detected. Proving that a party broke an agreement wrong is only half the job. The plaintiff must then prove that the damage was caused by the infringement and prove with certainty what the damage represents. Damages are the most common remedy in the event of a breach of contract. As a general rule, this type of remedy is used to compensate the non-injured party for losses suffered as a result of a breach of contract. They are not intended to punish the injured party, but to make the injured party “whole” again in accordance with the law. 1. Damages.
Damages (also known as “actual damages”) cover damages suffered by the non-infringing party as a result of the breach of contract. The amount awarded is intended to compensate for or replace the loss caused by the breach. There are two types of damages to which the non-injured party may be entitled: A. General damages. General damage covers damage caused directly and necessarily by the breach of contract. General damages are the most common type of compensation awarded for infringements. Example: Company A supplied the wrong type of furniture to Company B. After Company B discovered the virus later in the day, it insisted that Company A pick up the wrong furniture and deliver the right furniture.
Company A refused to pick up the furniture and said it could not deliver the right furniture because it was not in stock. Company B successfully filed a lawsuit for breach of contract. General damages for this breach could include: • reimbursement of an amount paid in advance by Company B for the furniture; plus • Reimbursement of expenses incurred by Company B for the return of the furniture to Company A; plus • Payment of any increase in costs incurred by Company B for the purchase of the good furniture or its subsequent equivalent from another seller.B. Special damages. Special damages (also known as “consequential damages”) include all damages caused by breach of contract due to special circumstances or conditions that are not normally foreseeable. These are actual losses caused by the breach, but not directly and immediately. To receive compensation for this type of loss, the non-infringing party must prove that it was aware of the particular circumstances or requirements at the time of the conclusion of the contract. Example: In the above scenario, if Company A knew that Company B needed the new furniture on a given day because its old furniture had to be taken away the day before, damages for breach of contract could include all damages awarded in the above scenario, plus: • Payment of Company B`s cost for renting furniture until the right furniture arrives. 2. Punitive Damages.
Punitive damages (also known as “exemplary damages”) are awarded to punish or set an example for an offender who acted intentionally, maliciously or fraudulently. Unlike damages, which are intended to cover actual damages, punitive damages are intended to punish the offender for egregious behavior and to prevent others from acting in the same way. Punitive damages will be awarded in addition to damages. Punitive damages are rarely awarded in the event of breach of contract. They are more common in criminal cases to punish intentional or reckless misconduct that results in personal harm. Nominal damages are usually awarded if no actual damage was caused by the breach of contract. .