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What remedies are there if a contract is breached in Tennessee?

| Nov 3, 2017 | Business & Commercial Litigation |

Business dealings take place every day across Tennessee, and are often much more complex than a mere smile and handshake. Detailed contracts are drafted that aim to account for every contingency and ensure each side is getting what they want out of the bargain. Unfortunately, we do not live in a perfect society, and contractual disputes still occur, even with the most well-drawn documents.

When a person does not perform his or her obligations per the terms of the contract, that person has breached the contract. The injured party in a breach of contract case can seek three types of remedies: damages, specific performance or cancellation and restitution.

First, there are damages, which involve one party paying money to the other party. Some damages are compensatory, meaning their purpose is to put the injured person in the position he or she would be in if there was no breach. Some damages are punitive, meaning that the amount to be paid is more than merely compensatory damages. They are meant as a punishment for especially egregious conduct and are not very common. Some damages are nominal, meaning they are simply a small amount awarded when there was no real financial loss to the injured party. Finally, there are liquidated damages, which are those provided for in the contract itself, and therefore agreed to ahead of time.

Sometimes the injured party will seek specific performance. In this remedy, the party that breached the contract will be ordered by the court to fulfill his or her obligations per the terms of the contract. This may be desired when the contract was for something so unique, that just receiving money would not make a person whole.

Finally, there is cancellation and restitution. Under this remedy, the injured party can cancel the agreement, which essentially renders it void meaning that the injured party and the breaching party need not perform under the contract. Then the injured party will file a lawsuit against the breaching party for restitution, which would place the injured party in the position he or she was in before the breach occurred.

As you can see, when a contract is breached, the injured party may have a number of remedies available. An attorney can help the injured party understand what his or her options are, so that the injured party can make informed choices moving forward.

Source: FindLaw, “Breach of Contract and Lawsuits,” Accessed Oct. 30, 2017