no need to leave your home to receive legal consultations and services - Call or click to learn more about phone and videoconferencing with our attorneys

What are Some Remedies for Breach of Contract?

Article written by Illinois & Iowa Attorney Kevin O'Flaherty
Updated on
October 28, 2019

In this article, we will explain some of the remedies most commonly used for breach of contract cases. Five remedies for breach of contract include: “Award of Damages”, “Restitution”, “Rescission”, “Reformation”, and “Specific Performance”.

What is a Remedy in Contract Law?

In contract law, a “remedy” is a court-ordered resolution to one party’s breach of contract. A breach of contract occurs when one party to a contract has not fulfilled his or her obligation under the agreement. The non-breaching party is also known as the “injured” party, and the purpose of remedies is to place the injured party in the position they would have otherwise been in had the contract been performed as it was agreed upon.

Compensatory Damages for Breach of Contract Explained

Award of damages is the most common remedy for breach of contract as one party seeks compensation for financial losses as a result of breach of contract. The party who is injured by the breach of contract is entitled to the benefit (consideration) of the agreement they entered, or the net gain they would’ve accrued had it not been for the breach.  This type of remedy is known as “compensatory damages.”  

During the court case, the injured party becomes the plaintiff. In the instance of a total breach, the plaintiff may recover damages in an amount that’s equal to the sum or value they would have received had the contract been fully performed by the defendant.  Sometimes, this includes lost profits from a business operation.

If the breach is only partial and the defendant carried out a majority of the contract, the plaintiff may seek damages in an amount equal to the cost of hiring someone else to complete the performance. If the portion of the uncompleted performance is quite small in terms of cost, however, the court may only award damages in an amount that’s equal to the difference between the diminished value of the agreement as completed and the full value as stated in the contract.

Punitive Damages for Breach of Contract Explained

Compensatory, or actual damages, cover the loss the non-breaching party incurred as a result of the breach. Punitive damages, known as exemplary damages, are awarded to punish or make an example of the wrongdoing of a party that acted willfully, maliciously or fraudulently. Punitive damages are awarded in addition to compensatory damages.  However, punitive damages are rarely awarded in breach of contract cases. Punitive damages are most often used in tort cases in which personal harm was a result of the wrongdoing and actual damages are minimal.

Restitution in Breach of Contract Cases Explained

Restitution is remedy designed to restore the injured party to its state or position before the contract was created. Unlike an award of damages, parties seeking restitution may not demand compensation for lost profits or other financial losses caused by a breach. Instead, restitution is meant to return any money or property given to the defendant under the contract back to the plaintiff.

Typically, a party will seek restitution when a contract they entered has been voided by courts because of the defendant’s incompetence or incapacity. Contract law allows incompetent and incapacitated individuals to be relieved of their contractual obligations, but only if the plaintiff is not hindered by the dismissal. In either case, if the defendant received any money or property by means of the contract that is now voided, the plaintiff is to be restored of that money or property.

Rescission in Breach of Contract Cases Explained

Rescission is a remedy used to terminate a contract when parties entered into a contract by way of fraud, undue influence, coercion, or mistake. In the case of rescission, the contractual obligations of both parties are therefore terminated, and the contract will no longer exist.

Reformation in Breach of Contract Cases Explained

Reformation is similar to rescission as it’s a result of parties entering into a contract based on fraud, undue influence, coercion, or mistake, but rather than terminating the contract and the parties’ obligations entirely, the court will change the substance of a contract to correct the inequities suffered as a result.

Specific Performance of a Contract Explained

Specific performance is a remedy for breach of contract in which the court forces the breaching party to perform the services or deliver the goods the promised goods per the contract.  Specific Performance is only available when money damages are inadequate to compensate the plaintiff for a breach.  This remedy is typically used when the goods or services are so unique that no other remedy could suffice.

A good example is an individual who’s looking to buy a rare piece of art. He or she forms a contract with someone to obtain this piece of art. The buyer’s offer becomes the price for the piece of art and the other party accepts by a promise of delivering the art in exchange for the agreed amount. If the other party joins in this contract, yet fails to deliver the art, the buyer can take the case to court as a breach of contract. The court could rule specific performance the remedy for breach of contract, as the buyer would not be able to get this rare piece of art elsewhere. The defendant would then be required by the court to deliver the goods – in this case, the art – as agreed upon in the contract.

Additional Financial Considerations
from Financial Experts

From Financial Experts

For many years, financial institutions have been creating a disservice to clients and the industry as a whole for years.
View More Professional Considerations

Presented By O'Flaherty Law

What is a Remedy in Contract Law?

Need Legal Help? 

Schedule a

What to Expect From a Consultation

The purpose of a free consultation is to determine whether our firm is a good fit for your legal needs. Although we often discuss expected results and costs, our attorneys do not give legal advice unless and until you choose to retain us. Although most consultations are complimentary, some may carry a charge depending on the type of matter and meeting location.

Leave a Comment With Your Questions

Read more about

Litigation & Dispute Resolution

Right now this is our only article. Don't worry we will be writing more soon!

We offer free, paid & Online CONSULTATION in:

Litigation & Dispute Resolution

Schedule a consultation with our Illinois & Iowa Attorneys

We offer free, paid & online consultation in nearly every area of law throughout Illinois and Iowa. We have a range of options to assist you with your legal needs.

What happens at a legal consultation?
Meet with an attorney for a free consultation to discuss what type of matter you need to discuss with an attorney.
Over the Phone Legal Consultations
Similar to In-person consultations, you discuss your legal needs with our attorneys to discuss your matter.
An online consultation is like an in-person and an over the phone online Consultation. You meet face to face with our attorneys through our online portal.
Paid Legal Consultations
While a free consultation allows us to discuss what we can do in general terms for your legal matter, a paid consultation allows us to answer direct questions.

contact us

Monday to Friday
9am - 5pm

Contact Us
Disclaimer: Our articles and comment responses do not constitute legal advice and are not intended to create an attorney-client relationship.

Please contact us to schedule a free consultation for legal advice specific to your situation.

Here are some articles that may interest you
Schedule a

Contact us for a Free Consultation

Schedule a free consultation

O'Flaherty Law is happy to meet with you by phone or at our office locations in:

Who We Are
We are your community law firm. Our Illinois & Iowa Attorneys are committed to providing exceptional client service in a cost-effective manner in the areas of Family Law, Probate, Estate Planning, Civil Litigation, Guardianship, Criminal Defense, Corporate & Contract Law, Bankruptcy and Real Estate.

Some of Our Accomplishments

Best Child Support Lawyers in Chicago
DuPage County Probate Attorney
Kevin P. O'Flaherty
Rated by Super Lawyers

loading ...
Naperville attorney
DuPage County Probate Attorney

Subscribe to our mailing list

* indicates required