When hiring someone to perform a job, most Arizona companies prefer to use contracts. Although contracts do not ensure that the tasks will be performed timely and to the company’s specifications, they do offer legal remedies should the vendor or subcontractor fail to live up to their end of the agreement. These remedies for a contract dispute include several types of monetary damages, which are outlined below.
First, there are liquidated damages, which would be detailed in the contract if they are applicable. These damages would be payable to the party harmed by any breach of contract. If the contract does not mention any liquidated damages, then it is up to the court to decide who pays what based on the specifics in the agreement.
In many cases, the court will order restitution, which means that the party who breached the contract must pay back what is owed. For example, if a designer is paid $500 to build a website and the project is never completed, the designer must pay back the $500. In minor cases when the contract was breached but nobody was harmed, the court may order nominal damages, which is a token amount of money.
The most common type of damages, however, are compensatory damages. These damages allow the wronged party enough money to hire the services of another party to perform the work. Using the example above, if the next lowest price to secure a designer would have been $1,000, then that is how much the company would be paid in damages, instead of $500.
It can be frustrating for an individual or company to rely on someone to perform certain services for them, only to have a breach of contract occur. A contract should always be used to protect the interests of both parties.
Source: FindLaw, “What is the Most Common Legal Remedy for a Breach of Contract?” accessed Dec. 5, 2014
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