Remedies for Breach of Contract

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Remedies for breach of contract

Contrary to what most people might think, the solution for breach of contract is not designed to punish the guilty party, instead it is to protect and preserve the rights and reasonable expectations of the party seeking reimbursement. The purpose of the contract law is that in the event of one party not fulfilling their obligation towards the other party, the party harmed will be compensated for its losses. In most cases the standard solution for breach of contract is money reimbursement, however, in some special cases the court can assign the party to perform a specific performance or injunction. With money reimbursement the court will allow the harmed party to prove to the court the amount of money necessary to reimburse for the losses, in other words, to prove that the amount of money the harmed company is seeking will reflect the guilty company performing the contract. The innocent party has three available options to them, which include self-help remedies, judicial remedies and arbitration.

Self-help remedies centre on lawful acts, which do not involve the option of referring to the court or arbitration. The innocent party under the law may refuse to perform their obligations as stated in the contract until the other party is ready or already has performed its obligations. The solutions of termination and withholding performance are closely related to the seriousness of the breach. Other self-help remedies that the innocent party may ...

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