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What damages can come from a breach of contract?

On Behalf of | Apr 17, 2020 | Contracts

No matter the size or scope of your business in Denton, having a contracted partner walk away from your agreement can be a damaging blow to your operations. Depending on the circumstances in which they choose to do so, however, you may choose to bring a claim for breach of contract. 

This prompts the obvious question of what sort of damages can you expect to collect in an action for breach of contract? The answer (again) is dependent on what you are able to prove. 

Recovering your losses 

Per the Judicial Education Center, compensatory damages cover the actual financial losses that your company suffered because of the breach. These can include direct costs (often referred to as “general damages”), such as: 

  • Funds your company expended in securing or providing a resource 
  • The cost of any tools, equipment or supplies involved in a project 
  • Compensation for the man-hours expended in the execution of a project or service 

Compensatory damages may also include special damages, which are the indirect losses your business may incur. An example of this might be a case where because of your partner’s breach of contract, another entity takes legal action against you. An indirect cost would be your company’s legal expenses. 

Taking punitive action 

In addition to compensatory damages, you may also be able to seek punitive damages. These are expenses meant to punish your now-former partner for their actions in ending your contract prematurely. Punitive damages are not always awarded in breach of contract cases. Your partner typically needs to have demonstrated blatant negligence or an indifference towards the law (as well as your business’ rights) in order for you to ask for them.