Breach of Contract Claims in New Jersey: Available Damages

Years ago, deals could be completed by two people looking at one another in the eye and shaking hands – rarely was an agreement put into writing. However, contracts – the building blocks of business – have evolved into complex, structured documents, which delineate the duties required of parties. Contract drafters do their best to take into account every occurrence that could affect a deal’s terms and clearly define the responsibilities of the parties. This attention to detail, unfortunately, does not stop some parties from violating the terms of an agreement, resulting in a breach of contract.

A breach of contract occurs when a contracting party fails to perform one or more of their duties without a legally recognized excuse. When this occurs, the non-breaching party is usually entitled to damages.

Types of Damages & Remedies

Contract disputes arise from sales contracts, services contracts, distributorship agreements, and construction disputes. This list could continue, but regardless of the type of contract, successful breach of contract plaintiffs can be awarded various types of damages. These damages include:

• Liquidated Damages: Pre-determined damages agreed to by the parties in the event of a breach (included within the contract itself)
• Restitution: Equitable award to prevent a breaching party from receiving a windfall as a result of their breach
• Expectation Damages: Damages designed to cover what a non-breaching party expected to receive from the contract (expected profits, etc.)
• Compensatory Damages: Damages designed to reimburse an injured party for reasonably foreseeable, indirect loss

A court’s main goal when awarding damages is to put the non-breaching party in the same position as if the contract was fully performed. Essentially, a party should receive what it reasonably expects to receive when it enters a deal.

Occasionally damage calculations are straightforward, but this occurs very rarely. It is important to have experienced legal representation in breach of contract cases to ensure a party receives the compensation deserved. Anyone injured from a breach of contract should speak with an experienced commercial litigation attorney to discuss their rights and legal options.