You entered into your contract agreement carefully. You thought the terms were clear, and you signed on the dotted line feeling confident. You trusted the other party to fulfill their duties and leave you with a “job well done.” That is what contracts are supposed to guarantee. But what if the other party does not hold up their end of the deal and leaves you to face the consequences?
Though frustrating, unfair, and unfortunate, this scenario is not uncommon. But it is not hopeless. With the help of a Houston business litigation attorney from Berg, Plummer, Johnson & Raval LLP, you can fight to recover your losses and hold the negligent party accountable for breach of contract.
Damages for Breach of Contract
There are different damages you may be entitled to following a breach of contract. In some cases, contract language establishes the consequences if one party fails to fulfill their part of the deal. Even if your contract does not include that information, an experienced breach of contract attorney in Houston will help direct your case and work toward fair compensation.
Compensatory Damages
As indicated in the name, “compensatory” damages compensate a party harmed by a breach of contract for their losses. Compensatory damages can be general or specific.
In pursuing general compensatory damages, you seek to recover direct losses sustained from the breach. For example, downhole drillers depend on their mud suppliers to deliver orders on time. If those suppliers fail, the driller has to purchase mud from another source – usually at the last minute. The rushed timing may make the purchase more expensive as the driller cannot negotiate a price and is thus required to pay extra for the rushed order. In seeking general damages, the driller may pursue:
- A refund of the money already paid to the mud supplier for the original order
- The difference between the amount of the original order and what the new supplier charged
- Reimbursement for the expense of sending the late, and now not-needed, mud back to the supplier
Special damages are also called “consequential damages.” They cover losses caused by the breach of contract that are not ordinarily predictable.
For example, if you, as the plaintiff (the non-breaching party), lost earnings, sustained damage to your reputation, or lost business opportunities because of the defendant’s contractual breach, you may be entitled to special damages.
Special damages may also apply when there are “special conditions” related to your contract. A party planner may order tents for a weekend-long outdoor bash. When those tents do not arrive on time, the planner has to rent tents to cover the delay. Those rental fees may be included as special damages as long as the party planner can prove the original tent company knew of the specific circumstances, in this case, the dates for the party, upon entering the agreement.
Liquidated Damages
Liquidated damages means the amount owed is readily ascertainable. If a company sells a drill bit for $100,000 and the buyer picks up the product but never pays, damages are clearly at least $100,000 – plus pre- and post-judgment interest and attorneys’ fees. Those damages are “liquidated.”
Specific Performance
When specific performance damages are applied to a breach of contract case, the terms of a contract are legally enforced after the breach has occurred. The remedy for the breach is to force the breaching party to honor that original deal. For example, if a property seller enters a contract agreement with a buyer and then refuses to sell, the buyer may seek specific performance damages to continue with the purchase.
A Houston breach of contract lawyer will help you decide if seeking specific performance damages is in your best interest. It is important to consider why the breaching party failed to uphold the deal, whether this remedy will cause the defendant harm or force them to act against their will, and / or if enforcement is impractical, among other issues.
Injunction
Injunctions serve the opposite purpose of specific performance where a party is ordered to act in order to fulfill the contract through specific performance. Under an injunction, a court may order a party not to act.
Employees must often sign non-compete agreements. For example, a salesperson who separates from a company may be bound by a non-compete. If the salesperson takes a job in sales with a competitor, a court may enter an order preventing the former employee from engaging in competition in violation of the employment contract signed with the former employer.
Injunctions can be temporary or permanent. Temporary injunctions may be ordered as the case is litigated to protect against further potential damage. Permanent injunctions are part of a final decision.
Rescission
Rescission allows the non-breaching party to back out of the contract legally. The contract is canceled, and both parties are restored to their pre-contractual situations. Rescission generally does not involve the pursuit or payment of monetary damages, though it may include an award of attorneys’ fees.
For rescission to apply, the breach has to be material to, or go to the heart of the contract. If you are a caterer, you may demand partial payment by a specified date. If the party who booked you does not pay, rescission likely applies. You can be released from providing the catering services agreed upon in the contract.
Considerations When Claiming Damages After a Breach of Contract
Several factors come under consideration in breach of contract cases, and each can influence the success of the case, including but not limited to those listed below.
Transparency
It is essential for the terms and conditions of a contract to be transparent or clear. The contract must clearly establish each party’s roles and responsibilities, as well as timelines, deliverables, benchmarks, standards for quality, performance indicators, methods of communication, and all other relevant factors.
Expectation
If expectations are not clearly established in a contract, it is hard to enforce them. If you claim a vendor, employee, service provider, or someone else has breached a contract by failing to meet expectations, you must prove that claim. It is not possible to do that if expectations are not defined.
Legality
You can only claim breach of contract if the contract in question is legal. The contract must comply with relevant laws and regulations for the jurisdiction. In addition, for your case to be heard, you must file a breach of contract lawsuit within the statute of limitations or legal deadline. In Texas, the deadline for filing breach of contract claims is generally four years from the date of the breach.
Defenses To Allegations of Breach of Contract
There are defenses to claims of breach of contract. For example, claims can be filed too late, contracts can be legally invalid, the breach may have occurred because of circumstances beyond the breaching party’s control, and / or the contract may have been signed under duress. These, and other situations, may lead to a claim’s dismissal.
Contact a Houston Breach of Contract Lawyer
When involved in a breach of contract case, you need an experienced attorney guiding your claim and fighting for you. Reach out to the Houston breach of contract lawyers at Berg, Plummer, Johnson & Raval LLP to get the help you need. Our skilled attorneys will provide bold representation so you can reach a favorable resolution.