Breach of Contract: What remedies are available?
Contracts are the backbone of commercial relationships. When one party fails to perform, the legal issue is rarely just whether there has been a breach, but what can realistically be done about it.
This article explains the main remedies available for breach of contract, how they operate in practice, and the strategic considerations that often matter more than the legal theory.
What Is a Breach of Contract?
A breach of contract occurs when a party fails to perform an obligation required by the contract, performs it improperly, or performs it late. The breach may be minor or fundamental, but not every breach automatically entitles the innocent party to terminate the agreement or recover substantial sums.
The law focuses on remedying loss, not punishing the breaching party. That principle shapes every remedy discussed below.
Damages: The Primary Remedy
Damages are the most common remedy for breach of contract. The aim is straightforward: to place the innocent party, so far as money can do so, in the position they would have been in had the contract been properly performed.
Damages are typically assessed by reference to:
direct financial loss caused by the breach;
losses that were reasonably foreseeable at the time the contract was made; and
losses that can be proven with sufficient certainty.
Speculative or remote losses are rarely recoverable. In practice, the strength of a damages claim often turns less on legal principle and more on evidence and commercial realism.
Duty to Mitigate Loss
A party claiming damages must take reasonable steps to reduce their loss. This is known as the duty to mitigate.
If a claimant unreasonably allows losses to escalate when practical alternatives were available, the court may reduce the damages awarded. This frequently becomes a contested issue, particularly in commercial disputes where replacement contracts, alternative suppliers, or substitute services are available.
Specific Performance: Compelling Performance
In limited circumstances, the court may order the breaching party to perform their contractual obligations rather than pay damages. This remedy, known as specific performance, is discretionary and not granted lightly.
It is typically reserved for situations where damages would be inadequate, for example, contracts involving unique assets or property. Courts are generally reluctant to force ongoing commercial relationships where trust has broken down.
Injunctions: Preventing Further Breach
An injunction may be used to prevent a party from acting in breach of a contract, rather than forcing them to perform it. This can be particularly relevant where confidentiality obligations, non-compete clauses, or restrictive covenants are involved.
As with specific performance, injunctions are discretionary and depend on urgency, proportionality, and fairness.
Termination and Repudiatory Breach
Not every breach allows a party to walk away from a contract. Termination is usually only available where the breach is sufficiently serious. This is often referred to as a repudiatory breach. Terminating prematurely or incorrectly can itself amount to a breach, so this step requires careful analysis before action is taken.
Liquidated Damages Clauses
Some contracts include clauses that pre-define the level of damages payable in the event of a breach. These clauses are enforceable provided they represent a genuine pre-estimate of loss rather than a penalty.
Well-drafted liquidated damages provisions can bring clarity and reduce disputes. Poorly drafted ones can unravel quickly under scrutiny.
Practical Considerations Before Taking Action
While remedies are defined by law, outcomes are shaped by strategy. Factors such as recoverability, cost exposure, timing, and commercial relationships often matter more than theoretical entitlement.
In many cases, early legal advice can prevent escalation, preserve leverage, and avoid unnecessary expense.
Closing Thoughts
Breach of contract claims are rarely about principle alone. They are about control, evidence, and outcome. Understanding the available remedies can make the difference between a paper victory and a commercially meaningful result.
Speak to a Solicitor today
If you require any assistance or would like to find out your options regarding breaches of contract or litigation in general, please contact us by sending an email to info@lyoncroft.co.uk, calling us on 020 3576 7170, or complete a contact-us form. Our offices are in Park Royal, London and you can find our address at the bottom of the page.
This article has been authored by Abdullah Suker, Managing Director of Lyon Croft Law.
