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Contract Enforcement Services for Minnesota and Wisconsin

Contracts arise when a duty does or may come into existence, because of an obligation made by one of the parties. To be legally binding as a contract, an obligation must be exchanged for adequate consideration - a benefit or detriment which a party receives which reasonably and fairly induces them to make the obligation. Certain obligations that are not considered contracts may, in limited circumstances, be enforced if one party has relied to his detriment on the assurances of the other party. Contracts law is very complex since:

  • Contracts are mainly governed by state statutory law.
  • Private law principally includes the terms of the agreement between the parties who are exchanging obligations.
  • Statutory law may require some contracts be put in writing and executed with particular formalities. Otherwise, the parties may enter into a binding agreement without signing a formal written document.
  • Most of the principles of the common law of contracts are outlined in the Restatement Second of The Law of Contracts published by the American Law Institute.
  • The Uniform Commercial Code, whose original Articles have been adopted in nearly every state, represents a body of statutory law that governs important categories of contracts.

What is a "Breach of Contract"?

A contract creates certain duties and obligations that are to be fulfilled by the parties who entered into the agreement. One party's failure to fulfill its duties and obligations under a contract is known as a "breach" of the contract. Depending on the specifics of the contract, a breach can occur when a party fails to perform on time, does not perform in accordance with the terms of the agreement, or does not perform at all. Accordingly, a breach of contract will usually be categorized as either "material" or "immaterial" for purposes of determining the appropriate legal solution or "remedy" for the breach.

Breach of Contract Remedies

When one party breaches a contract, the other party to the agreement is entitled to relief (or a "remedy") under the law. The main remedies for a breach of contract are (1) damages, (2) specific performance, (3) or cancellation and restitution. The remedy that is most often used for a breach of contract is the remedy of damages - payment in one form or another, made by the breaching party to the non-breaching party. There are many kinds of damages, and generally speaking damages may be very specific to the kind of breach that has occurred. Following are some guidelines on damages.

  • Compensatory damages aim to put the non-breaching party in the position that they had been if the breach had not occurred.
  • Punitive damages are payments that the breaching party must make, above and beyond the point that would fully compensate the non-breaching party. Punitive damages are meant to punish a wrongful party for particularly wrongful acts, and are rarely awarded in the business contracts setting.
  • Nominal damages are token damages awarded when a breach occurred, but no actual money loss to the non-breaching party was proven.
  • Liquidated damages are specific damages that were previously identified by the parties in the contract itself, in the event that the contract is breached. Liquidated damages should be a reasonable estimate of actual damages that might result from a breach.
  • Specific Performance. If damages are inadequate as a legal remedy, the non-breaching party may seek an alternative remedy called specific performance. Specific performance is best described as the breaching party's court-ordered performance of duty under the contract. Specific performance may be used as a remedy for breach of contract if the subject matter of the agreement is rare or unique, and damages would not suffice to place the non-breaching party in as good a position as they would have been had the breach not occurred.
  • Cancellation and Restitution. A non-breaching party may cancel the contract and sue for restitution if the non-breaching party has given a benefit to the breaching party. "Restitution" as a contract remedy means that the non-breaching party is put back in the position it was in prior to the breach, while "cancellation" of the contract voids the contract and relieves all parties of any obligation under the agreement.

Chmielewski Law Office offers comprehensive contract legal services including but limited to review of existing contracts, drafting of new contracts, defense in contract breach claims, filing suit for contract performance. Contact Chmielewski Law Office today via our email form or toll free at 866-446-6529 for a complimentary initial consultation with a contracts attorney regarding your business contract issues.