What is a breach ? How a contract is breached.

Well the first thing we need

to understand is what is a breach how do we define this thing we call
breach of a contract ? well a breach is an unjustified failure to perform the
terms of a contract now that failure might be something like failure to deliver
goods failure to deliver services if it's the contract for services failure to
complete a job that was described and promised in the contract failure to pay
on time and it might even involve providing inferior goods or services you
know those are just some examples of what a breach might might be basically
it comes down to this it's a broker breach as a broken promise to do or provide
something.

There are two basic types of remedies

that courts can grant: damages and equitable remedies

Damages
Damages are contract law's main remedy their purpose is to compensate the
non-breaching party by giving them the benefit of their bargain we can
distinguish between different types of damages if applicable to the specific
situation

One or more of the following types of monetary damages may be claimed at

the same time and in addition to one another. The first category compensatory
damages puts the non-breaching party in the same position that it would have
been in if the contract had been performed as promised by the other party the
measure of compensatory damages is the difference between the value of the
contract as originally promised and the value of the contract actually received
this is often referred to as the loss in value that is being compensated for for
instance if goods are involved then the loss and value would be the current
market price of the goods minus the original contract price. Alternatively if a
party covers that is it buys substitute goods because the goods it contracted
for were not delivered then the loss in value would be the cost of covering
minus the original contract price suppose that someone buys a laptop from a
computer store but the store does not deliver the device the damages would
be equivalent to either the difference between the agreed price and the
current market price of the laptop or the difference between the agreed price
and the price that the purchaser paid to buy the laptop from another dealer

A second category are incidental damages these damages cover ordinary

expenses that directly arise from the breach and that are incurred by the non-
breaching party they will be offset by any losses that were avoided by the non-
breaching party. Common examples of incidental damages include additional
costs of shipping storage and advertising that arise because a non-breaching
party has to make new arrangements as a consequence of the other party's
failure to perform
The final category are consequential damages these damages pertain to
special losses caused by the breach the most common examples of
consequential damages is a loss of profits since these damages can be
potentially quite large and unexpected for the other party they can only be
claimed if they were reasonably foreseeable when the contract was made and
provided that they could be measured with reasonable certainty this principle
is illustrated in the classic English

case of Hadley versus Baxendale: the plaintiff in this case was Hadley who
operated a mill that produced flour and other grain-based products at one
point a mechanical component of the mill steam engine broke and Hadley
arranged to have a new one made. However the engineering business that
agreed to make the new crankshaft required at the broken one be sent to
them in order to ensure that the new one would fit properly. Hadley therefore
contracted with another business represented by Baxendale to deliver the
crankshaft to the engineers by a certain date in order to enable the work on
the new crankshaft. However Baxendale failed to deliver in a timely manner
which caused a delay in making the new crankshaft which in turn caused
Hadley to lose business as he wasn't able to operate the mill without the new
part. Hadley sued for the profits he lost due to Baxendale's late delivery and
won in the lower court. Baxendale appealed contending that he did not know
that Hadley would suffer any particular damage by reason of the late delivery.
The question raised by the appeal was whether Baxendale could be held
liable for damages that the defendant was not aware would be incurred from a
breach of the contract. The court held that Baxendale would not be liable for
consequential damages, the court stated that Hadley's loss of profits could not
reasonably be considered a consequence of the breach of contract that would
have been fairly and reasonably contemplated by the parties. When they
entered into the contract the general rule following from the case is still
applicable today a party is liable for all losses that the party could have
reasonably foreseen including lost prophets but not for those that the party
could not have reasonably foreseen (evident)

Equitable Remedies
when money damages which are the usual legal remedy are inadequate and
would not fully compensate for a breach then an equitable remedy in the form
of non-monetary damages may be awarded by a judge. Equitable remedies
include specific performance rescission and restitution liquidated damages
and promissory estoppel the equitable remedy of specific

Specific Performance
The equitable remedy of specific performance requires that the contract be
performed as promised it is only applicable or will only be granted by a court
when the subject matter of the contract is so unique that money damages will
not suffice this could be the case for instance when someone buys unique
objects such as antiques artwork or real estate a court could order a non-
performing seller to transfer or sell these items to the buyer instead of
awarding monetary damage.
Rescission and Restitution
Rescission and restitution means that a contract is terminated the agreed
obligations come to an end and the parties are ordered to return any benefits
that they receive from the other party so that both are in the same position as
before the contract. Rescission and restitution apply in particular in some of
the instances that we already talked about previously this includes when a
contract is avoided due to fraud duress mistake or based on other reasons the
purpose of restitution is to prevent unjust enrichment that is when one of the
parties is enriched at the expense of the other

Reformation
Another equitable remedy is reformation. This is an option when a contract
does not accurately reflect the true intent of the parties. It entails rewriting the
contract or adjusting the contractual language of a specific provision by the
court in order to reflect the true intentions of the parties. It is typically used
when there is a typographical error in the contract

Liquidated Damages
Liquidated damages are damages that the parties agree on in advance of a
breach they will be contained in specific contract clauses that address the
issue of damages and they may specify the exact amount that will be owed by
a party that is in breach of the contract. Liquidated damages can be useful
when actual damages are hard to ascertain they are permissible as long as
the amount agreed upon is not considered a penalty which would be the case
if the agreed amount is unreasonably large

Promissory Estoppel
in situations where an enforceable contract does not exist a party can
sometimes be awarded reliance damages under promissory estoppel this
protects a party's reasonable and detrimental reliance upon a promise this is
what happened for example in the case of Hoffman vs Red Owl stores

The case:

Hoffman v. Red Owl Stores (1965) involved Harry Hoffman, who relied on
Red Owl's promise to grant him a franchise. He made significant life changes,
such as selling his bakery and moving his family, based on this expectation.
When Red Owl ultimately refused the franchise, Hoffman sought damages.

The court applied the doctrine of promissory estoppel, ruling that Hoffman had
reasonably relied on Red Owl’s promise and suffered losses as a result. It
emphasized that even without a formal contract, damages could be awarded
to compensate for the detrimental reliance on a promise.