Parties enter into a contract with the goal of everything going as planned. But unfortunately, things can happen that prevent people from performing the contract. When the unexpected happens, it’s essential to understand the legal remedies for breach of contract and to contact an attorney to protect your legal rights.
Mallery s.c. has years of experience helping individuals and businesses throughout Wisconsin successfully navigate even the most complex contract dispute. We’re here to help.
Contract Law Basics
Before discussing remedies for breach of contract in Wisconsin, we need to review some contract law basics. After all, you can’t get any remedy for a breached contract unless it’s binding. What’s more, you may be surprised to discover that not all breaches are equal and thus merit a substantial, or any, remedy.
Elements of a Binding Contract–
There are five essential elements of a binding contract:
- Offer – One party submitted an offer to do something in exchange for something else. For example, a potential home buyer submits an offer to buy a house.
- Acceptance – The party receiving the offer understands that it’s an offer and accepts it. For example, the seller may sign the contract the home buyer submitted.
- Consideration – Both parties have sufficient “skin in the game” and stand to lose and gain something by the performance of the contract. For example, the buyer agrees to give up money in exchange for keys to the home, and the seller agrees to give up the property in exchange for cash.
- Capacity – Both parties have the capacity to enter the contract. For example, agreements with minors are generally voidable, and the child can either repudiate the contract or enforce it.
- Legality – The subject of the contract is legal, and it must be in the proper form. For example, land contracts typically need to be in writing and signed by the person against whom the agreement is being enforced.
If any of these are missing, you may not be dealing with a valid contract.
Different Types of Breaches of Contract
Not all errors or inconsistencies constitute a breach that could form the basis of a lawsuit. In other words, some violations of the terms of a contract are just not serious enough to justify pursuing a remedy and are better dealt with using less formal means. Mallery s.c. is here to answer all your contract questions and help you understand the best way to deal with contract disputes.
As the name implies, a minor breach is when an error or inconsistency occurs, but it’s minor. In most cases, a minor breach—like a misspelled name or clerical error—won’t impact the parties’ abilities to carry out the contract. Often, the parties can fix a minor breach by issuing a correction or something to that effect.
In contrast, a material breach is when someone fails to do or refrains from doing what they promised in the contract. It speaks to the heart of the bargain. For example, this is when the buyer refuses to buy the house or the seller won’t deliver the goods to the buyer. Many times, material breaches are what lead to a contract dispute or litigation.
An anticipatory breach is when a party to the contract lets the other party know they won’t perform their obligations under the agreement. It’s called an “anticipatory breach” because, instead of waiting until the time for performance, the party tells the other party ahead of time.
What Remedies Are Available for Breach of Contract?
Ultimately, the contract and applicable law determine the scope of remedies for a breach of contract. Let’s review some remedies for a material breach of contract.
Liquidated damages are an award of a specific amount of money either stated in the contract or readily quantifiable. For example, many residential real estate contracts indicate that the seller’s remedies for a breach of contract by the buyer include keeping the earnest money deposit. In this case, the earnest money is the amount that the parties agree represents the liquidated damages if there’s a breach.
Note that liquidated damages do not serve to punish the breaching party. Instead, it’s an agreed-upon amount or quantifiable measure of damages under the circumstances.
In limited cases, the courts will require the parties to perform the contract as promised in the original agreement. When this happens, it’s called “specific performance” because, for example, the court makes the seller hand over the keys to the house or the car as they said they would.
Very few cases warrant forcing someone to perform a contract they breached or of which they tried to get out. Forcing the fulfillment of the contract generally leads to more problems than it solves.
Compensatory damages seek to compensate the non-breaching party for the consequences they suffered because of the breach. Typically, they serve to put the non-breaching party in as close of a position as possible to what they would have been in if the parties had performed the contract. But they can also reimburse the non-breaching party for costs incurred because they completed their end of the bargain.
For example, a seller’s remedies for the buyer’s breach of contract may include reimbursement for inspection or repair costs.
Mallery s.c.—Providing Exceptional Legal Services Throughout Wisconsin
If you are in the midst of a contract dispute, talking to an experienced attorney can help minimize your financial losses and maximize your compensation. Our team includes Alexandra Don, named a Developing Leader All Star by NAIOP in 2020 and 2021. We can help you handle all types of legal problems efficiently before they cause additional harm. Call our legal team today or contact us online for a free consultation.