Specific performance is rarely awarded for breach of contract, unless the subject of the contract was so rare or unique that no amount of compensatory damages could put the innocent party in the position they would have been in had there been no breach. The breaching party would be required to perform their obligations under the contract or face contempt of court charges. Specific Performance: If monetary damages are insufficient to compensate the innocent party, then the court might order specific performance.
Restitution would require the customer to return the bed. After the carpenter builds the bed, the customer refuses to pay and breaches the contract. For example, a customer enters into a contract with a carpenter to build a bed.The court looks at what the party who breached the contract gained prior to the breach and orders it returned to the other party. Restitution: Restitutionis intended to put the innocent party in the position they were in before they entered into the contract.Punitive damages might be awarded to punish the breaching party, but are much less common. Usually that means awarding the innocent party an amount of money that gives them the “benefit of the bargain” or allows them to enter into an agreement with someone else for the same service.Monetary Damages: Compensatory damages are awarded in an attempt to put the innocent party in the position they would have been in if the contract had been performed.There are several legal remedies available when there has been a breach of contract. In the absence of language in the contract that states what will happen if the contract is terminated, the parties have the option to seek a legal remedy for any breach. The terms of the contract might also determine what happens after the contract is terminated. However, one or both parties might be liable for breach of the terms of the contract prior to termination. What Happens After the Contract is Terminated?Īfter a contract is terminated, the parties to the contract do not have any future obligations to each other. When and how the contract is terminated will determine whether either party has any liability for breach of the contract before it was terminated. There are a variety of reasons why a party can terminate a contract. Terminating a contract means legally ending the contract before both parties have fulfilled their obligations under the terms of the contract. If they fail to do so, they have breached the contract and can be held liable in a court of law. Once the parties have come to an agreement regarding the terms of the contract, they are both legally obligated to fulfill their obligations under the contract. For example, when a person contracts with a carpenter to build a bed, the carpenter builds a bed in exchange for payment at the agreed upon price. Consideration is the agreed upon exchange between the parties. Contracts can be oral or written, though it is generally recommended that contracts be in writing and signed by both parties.Ī contract is formed when there is an offer to do something, acceptance of that offer, and consideration. What Does It Mean to Terminate a Contract?Ī contract is a legally enforceable agreement between two parties for goods or services.
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