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What happens following a breach of contract?

When parties agree to a contract, both sides expect that the other will follow through on their end of the bargain . Unfortunately, however, one party sometimes goes back on the deal and breaches the terms. Whether it is a lease dispute or contract for construction, real estate litigation is not usually considered an enjoyable experience to have to enter into.

A breach of contract occurs when one party fails to fulfill the obligations it agreed to within a contract. This can take place when a party either does not perform in accordance with the stated terms, does not perform on time, or even fails to perform at all. Once a party recognizes the other party's failure to complete the stated obligations, a few options arise.

Upon the happening of a breach of contract, one or both parties may attempt to enforce the contract on its terms. Alternatively, either one may try to recover any financial loss occurring as a result of the breach. A party may bring a breach of contract lawsuit in an attempt to achieve either of these outcomes. Additional resolution options include pursuing mediation or alternative dispute resolution. Any of these options are able to afford a remedy to the non-breaching party.

There are three main categories of remedies available to a non-breaching party. The most common remedy is that of damages-payment of money to the non-breaching party. Another remedy option outside of monetary damages is that of specific performance, or requiring a party to complete the contractual duty. Lastly, a court may allow for cancelation of the original contract while leaving a non-breaching party the ability to sue for restitution. This generally includes monetary payment to the non-breaching party in order to place them in the same position as they would have been before the breach occurred.

Many options exist for non-breaching parties when another party fails to complete its contractual duties. It is important to know which options are available in each particular contract breach in order for the non-breaching party to receive the compensation it deserves.

Source:, "'Breach of Contract' and Lawsuits," Accessed Sept. 1, 2014

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