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Effective measures for dealing with breach of contract

Business contracts are some of the most useful tools available to Arizona companies of all types and sizes. These agreements allow two parties to enter a mutually beneficial relationship while providing protection and insurance to everyone involved. When one party violates the terms of the agreements or fails to meet the demands of the contract, it can lead to financial loss, legal complications and other difficulties. At this point, it may be appropriate to take legal action against the offending party. 

Effectively dealing with breach of contract matters is critical. Quick action may help decrease the negative impact the breach will have on the business, and it may be helpful in reaching a resolution that is sustainable and satisfactory. While it may be necessary to deal with a breach of contract through litigation, out-of-court solutions are sometimes possible as well. 

What types of damages are appropriate? 

The pursuit of a civil claim after a breach of contract is typically with the intent of securing reasonable damages. The specific damages available depends on the details of the individual situation, such as the extent of financial loss and inconvenience caused by the breach of contract. Types of damages that may be appropriate after a contract violation include: 

  • Punitive damages — These damages go above and beyond the specific number of losses experienced, and their intent is to punish the offending party for the breach. 
  • Compensatory damages — These damages should place the non-breaching party in a position similar to where they would be if there was no breach of contract. 
  • Liquidated damages — Liquidated damages are available in cases where the terms of the contract identify the amount in case of a breach. 
  • Nominal damages — These damages are small amounts given to the non-breaching party, typically in cases where financial loss is difficult to prove.  

Breach of contract matters are sensitive, and they can present various complex legal challenges for a business. It could be prudent for the non-breaching party to take immediate and definitive action after experiencing these complications to learn as much as possible about the specific legal options available. Through negotiations and discussions, the two parties may be able to reach a satisfactory agreement regarding damages or adherence to terms. In situations where this is not possible, litigation may be the most appropriate way forward. 

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