Remedies for Breach of Contract in MA

When you enter into a contract, you expect the other party to do what they promise, especially in the business world, where failure to uphold their end can cause a domino effect, delaying or stopping plans contingent on the contract.

A breach that forces you to scramble to minimize your losses can mean a serious departure from long-term goals. To recover, you can sue for one or more remedies for breach of contract.

At Berluti McLaughlin & Kutchin LLP, we have years of experience helping clients through contract disputes. For help pursuing damages or another remedy, reach out to us.

We can evaluate your options, provide our advice, and pursue settlement outside the courtroom or litigation inside the courtroom—whichever makes the most sense for you and your case.

What Is a Breach of Contract?

You breach a contract when you do something inconsistent with fulfilling the contract or fail to do something the contract requires.

People breach contracts every day in small and big ways. Different breaches can justify different remedies depending on what the breach involves and when the breach occurs.

Breach of Contract Remedies

In legal terms, the goal of a breach of contract lawsuit is to restore the parties to the positions they would be in if the breach had not occurred. Common breach of contract remedies include:

Termination,
Rescission, and
Damages.

An attorney well-versed in contract law can help you identify what remedies are available to you in a breach of contract claim.

Contract Termination

When you request termination, you ask a court to declare that neither party is obligated to perform the contract anymore. That declaration does not undo work already done.

A common reason to request termination is that the other party has breached the contract. Not every breach justifies termination, however, as the breach usually has to be “material.”

A breach is material if it impacts a party’s reasons for entering into the contract. Consider a contract for a construction company to build 20 condos by the end of a particular year.

The party that hired the company would breach by not paying the agreed-upon price at the agreed-upon time. The construction company could breach in more ways, such as:

Not building any condos by the end of the year,
Building less than 20 condos before the end of the year, or
Building 20 condos that do not meet the contract’s specifications.

Whether the first two examples are material breaches depends on the circumstances, including whether the construction company can or will correct the issues.

For instance, if the construction company finished the condos before the hiring party needed them or the departures from the specifications did not affect the value of the condos, the breach may not be material.

Contract Rescission

Contract rescission means canceling and undoing a contract. Essentially, you ask a court to void and reverse the contract as if it never occurred. You might request rescission if the contract involved some form of:

Fraud or misrepresentation,
Coercion or duress,
Mistake by both parties, or
Unconscionability (patent unfairness).

You can also request rescission if the contract becomes impossible to fulfill. For example, a contract may become impossible if it involves building on land that washes away in a hurricane.

Types of Contract Damages

You can also ask for damages. Potential types of contract damages include:

Consequential (“special”),
Incidental (“general”), and
Liquidated damages.

Consequential and incidental damages are compensatory damages designed to compensate you for costs incurred related to or resulting from the breach. Incidental damages include costs directly incurred in responding to the breach.

Consequential damages involve the consequences of the breach beyond direct costs, like lost opportunities. Some contracts limit the ability of either party to recover consequential damages.

Depending on the contract, you might be entitled to liquidated damages. These damages are an amount the parties agree to in a contract should a breach occur. The contract should specify when and how you become entitled to them and how much you can claim.

Specific Performance

Specific performance involves a court ordering the breaching party to perform the contract as written rather than compensating the non-breaching party.

It is considered an extraordinary remedy, and fulfilling the contract through monetary damages must be inadequate to justify specific performance. Courts typically only order specific performance when a contract involves unique items or property.

Consider two contracts. One requires an artist to create a work of art in their unique style, paid at an hourly rate. The other is a contract for an existing work of art in that artist’s distinctive style. A court will not enforce the contract requiring the artist to create a new work through specific performance.

However, it may enforce the contract for their existing work through specific performance, requiring the seller to deliver the specific work.

Collecting Damages for Breach of Contract

When a party breaches a contract, which causes the other party to lose money or opportunities, the harmed party may collect compensatory damages for breach of contract, valued based on the costs they incurred.

You may recover damages to restore you to the position you were in before the contract or to cover costs you incurred due to the breach.

Damages to restore your former position may include, for example, the return of payments provided to the other party. Damages to cover costs you incurred may include the cost of hiring someone else to fix improperly installed equipment.

Suing for Breach of Contract

If you entered into a contract and the other party breached it, recovering damages may be crucial to keeping your plans on track.

Our multidisciplinary team is well-versed in the available remedies for breach of contract in Massachusetts. Contact us today to learn how we can guide you through pursuing remedies inside or outside the courtroom.