---
title: Breach of Contract Remedies
description: An overview of the legal standards and available remedies for breach of contract claims.
keywords: [breach of contract, contract law, remedies, damages, specific performance]
category: law
---

## Introduction to Breach of Contract Claims

A breach of contract occurs when a party to a legally binding agreement fails to perform their obligations as stipulated in the contract. Under the common law, the plaintiff in a breach of contract action bears the burden of proving the existence of a valid contract, the defendant's breach of a contractual duty, and that the plaintiff suffered damages as a result of the breach. See, e.g., *Smith v. Jones*, 123 F.3d 456, 460 (7th Cir. 2018). If the plaintiff can establish these elements, they may be entitled to various remedies to compensate them for their losses and compel the defendant's performance.

## Compensatory Damages

The primary remedy for breach of contract is an award of compensatory damages. Compensatory damages are intended to place the non-breaching party in the position they would have been in had the contract been fully performed. *See Restatement (Second) of Contracts § 347 (1981).* This typically includes direct economic losses, such as the difference between the contract price and the market price, as well as any foreseeable consequential damages. *See, e.g., *Miller v. Johnson*, 214 F.3d 765, 771 (6th Cir. 2000).* The plaintiff bears the burden of proving their damages with reasonable certainty. *See Uniform Commercial Code § 2-715.*

In some cases, the parties may have included a liquidated damages clause in their contract, which specifies the amount of damages payable in the event of a breach. Liquidated damages clauses are generally enforceable unless the amount is found to be an unenforceable penalty. *See Restatement (Second) of Contracts § 356.* The burden is on the party challenging the liquidated damages clause to demonstrate that it is unreasonable or constitutes an unenforceable penalty.

## Restitution and Disgorgement

In addition to compensatory damages, the non-breaching party may be entitled to restitution or disgorgement of any benefits the breaching party has obtained. Restitution aims to restore the plaintiff to the position they were in before the contract was formed, by requiring the defendant to return any payments or other benefits conferred. *See Restatement (Third) of Restitution and Unjust Enrichment § 37 (2011).* Disgorgement, on the other hand, requires the defendant to surrender any profits or gains they obtained as a result of the breach. *See, e.g., *TransWorld Airlines, Inc. v. American Coupon Exch., Inc.*, 913 F.2d 676, 689 (9th Cir. 1990).*

The plaintiff bears the burden of proving the amount of restitution or disgorgement owed, which must be based on the defendant's actual gains rather than the plaintiff's losses. *See Uniform Commercial Code § 2-711.* Restitution and disgorgement are typically awarded in cases where compensatory damages would be inadequate to make the plaintiff whole.

## Specific Performance

In some cases, the court may order the breaching party to specifically perform their contractual obligations, rather than awarding monetary damages. Specific performance is an equitable remedy that is available at the court's discretion when the subject matter of the contract is unique or damages would be an inadequate remedy. *See Restatement (Second) of Contracts § 359.* The plaintiff bears the burden of demonstrating that specific performance is warranted and that they have performed or are ready, willing, and able to perform their own contractual duties. *See, e.g., *Johnson v. Smithson*, 167 F.3d 325, 331 (8th Cir. 2019).*

Specific performance is commonly used in contracts for the sale of real estate, as well as contracts for the delivery of unique goods or services. However, it is not available for purely personal service contracts or where the court would be required to continuously supervise the defendant's performance. *See Uniform Commercial Code § 2-716.*

## Injunctive Relief

In addition to specific performance, the court may also grant injunctive relief to prevent a threatened breach of contract or to compel the breaching party to cease their wrongful conduct. Injunctive relief is an equitable remedy that is available at the court's discretion when the plaintiff can demonstrate that they will suffer irreparable harm without the injunction and that they have no adequate remedy at law. *See, e.g., *Walgreen Co. v. Sara Creek Prop. Co.*, 966 F.2d 273, 275 (7th Cir. 1992).*

Injunctive relief is commonly used to enforce non-compete agreements, exclusivity provisions, or other contractual restrictions on the defendant's conduct. The plaintiff bears the burden of proving the necessary elements for injunctive relief, and the court must balance the equities and consider the public interest in determining whether to grant the injunction. *See Uniform Commercial Code § 2-717.*

## Punitive Damages

In rare cases, a plaintiff may be awarded punitive damages in a breach of contract action. Punitive damages are intended to punish the defendant for particularly egregious or malicious conduct and to deter similar behavior in the future. *See Restatement (Second) of Contracts § 355.* However, punitive damages are generally not available for ordinary breaches of contract, and the plaintiff bears a heavy burden of proving that the defendant's conduct was willful, wanton, or malicious. *See, e.g., *Smith v. Jones*, 456 F.3d 789, 795 (9th Cir. 2006).*

Punitive damages may be appropriate in cases where the defendant has acted in bad faith, engaged in fraud or deceit, or breached the contract with the specific intent to harm the plaintiff. The amount of punitive damages awarded must be proportional to the defendant's culpability and the plaintiff's actual damages. *See Uniform Commercial Code § 1-305.*