What happens if someone breaches a contract?

A breach of contract occurs when a party to a valid, enforceable contract fails to fulfill their obligations without a legal excuse. When a breach occurs, the non-breaching party has several legal remedies available to make them "whole." ^[1][2] **Types of breach ^[1] - Material breach — a significant failure to perform that defeats the purpose of the contract; the non-breaching party is excused from their own performance obligations and can sue for full damages - Minor/partial breach — a less significant failure; the non-breaching party must still perform but can sue for damages caused by the partial breach - Anticipatory breach — when a party clearly communicates before the performance date that they will not perform (e.g., "I'm not going to do what I promised"); the other party can immediately treat it as a breach and seek remedies Remedies for breach of contract ^[1][2] 1. Compensatory damages (most common) The goal is to put the non-breaching party in the position they would have been in if the contract had been performed: - Expectation damages — the benefit of the bargain (lost profits, cost of cover) - Consequential/incidental damages — foreseeable losses flowing from the breach - Reliance damages — expenses incurred in reliance on the contract 2. Specific performance A court order requiring the breaching party to perform their contractual obligations. Typically available only when money damages are inadequate — primarily for contracts involving unique goods or real estate**, since no amount of money can substitute for a specific piece of property. ^[2] 3. Rescission Cancellation of the contract, returning both parties to their pre-contract positions. Available when there has been a material breach, fraud, or mutual mistake. 4. Restitution Requires the breaching party to give back any benefit they received to prevent unjust enrichment. 5. Liquidated damages If the contract itself specifies a damages amount for breach, courts will enforce it if the amount was a reasonable estimate of actual damages at the time of contracting (not a "penalty"). ^[1] Duty to mitigate The non-breaching party has a legal duty to mitigate (minimize) damages. You cannot recover for losses you could have reasonably avoided. Statute of limitations Claims for breach of written contracts typically have a 4–6 year statute of limitations (varies by state); oral contracts often have a shorter limit of 2–4 years. *If you believe someone has breached a contract with you, document everything (the contract, communications, and losses) and consult a contracts attorney promptly to preserve your remedies.*