Also known as: damages for breach of contract · breach damages
Written by attorneys · grounded in primary & secondary sources — see below
Monetary compensation awarded to the injured party upon breach of contract. The award places the injured party in the position it would have occupied had the contract been performed, subject to requirements of certainty and foreseeability.
Dylan Duffy contracted with Drake Logistics to deliver specialized parts by a fixed date. The agreement set liquidated damages at $5,000 per day of delay. When Drake delivered two weeks late, Duffy proved the clause reflected a reasonable forecast of lost production time and proof difficulties. The court enforced the clause and awarded the stipulated amount.
Diane Dawson sold custom equipment to Dawson Steel under a contract that prohibited assignment. After Dawson Steel accepted defective units, Dawson assigned her right to damages for the breach to a financing company. The assignment did not change Dawson Steel's duties or increase its risk. The financing company could enforce the damages claim despite the prohibition.
Select any source to read its text and confirm it supports the definition.
Diego Duarte agreed to pay Dixon Foods a fixed sum if he failed to deliver produce by harvest. The contract stated that Duarte's duty to pay damages would end if a government embargo occurred. When an embargo blocked delivery, Duarte's obligation to pay damages was discharged. Dixon Foods could not recover the stipulated amount.
Demetrius Douglas bought industrial freezers from Duarte Shipping that failed to maintain required temperatures. Douglas accepted the units after inspection but later discovered the defect. The freezers were worth $40,000 less than warranted at acceptance. Douglas recovered the difference in value as damages for breach of warranty.
Denise Donovan contracted with Dixon Foods to supply unique heirloom seeds for a limited growing season. The agreement included a liquidated damages clause for nondelivery. When Dixon failed to deliver, Donovan sought specific performance because substitute seeds were unavailable. The court granted the injunction even though the clause was valid.
Dylan Duffy leased warehouse space from Drake Logistics with a clause requiring two years' rent upon any early termination. Duffy vacated after six months when market conditions changed. The landlord proved no actual loss beyond one month's vacancy. The court refused to enforce the clause as an unenforceable penalty.
A clause fixing damages is unenforceable if the amount is unreasonably large in light of anticipated or actual loss and proof difficulties. Courts treat such terms as penalties that violate public policy.
Yes. After acceptance and proper notice, the buyer may recover the difference between the value of the goods as accepted and their value as warranted at the time and place of acceptance.
No. Specific performance or an injunction remains available to enforce a duty even when the contract contains an enforceable liquidated damages provision.
Punitive damages are not recoverable for breach of contract unless the breaching conduct also constitutes a tort for which punitive damages are independently recoverable.
The injured party must establish the fact and amount of loss with reasonable certainty. Lost profits and other elements require proof that meets this standard, though doubts are resolved against the breaching party.
…any other corporate or private citizen of this state under similar circumstances would most certainly have been liable in damages for breach of contract. While I agree with the majority that the trial court erred in not granting the defendants’ post-trial motions for judgment notwithstanding the verdict on the misrepresentation claim, I…