Remedies for the Breach of Contracts in Business

Introduction

This report is based on the eight different remedies that are available to businesses if their contracts with other businesses are breached. When a contract is breached, this means that the terms that have been agreed by both parties before completing their business venture together have been broken in some form or another. Once a contract is in place it is legally binding and can be enforced by the appropriate legislation in the courts. Remedies for breach of contract are alternative methods that going to court and they can be very beneficial to larger companies in particular as it can save a lot of time, money and reputation. There are eight different remedies that businesses can choose from for different situations: liquidated damages; unliquidated damages; rejection; lien; resale; reservation of title; injunction and Specific performance.

In this report I will be discussing these eight different remedies and relating them to the Rocky Tops scenario that I have been referring to for the rest of the tasks I have been set.

Liquidated damages

Liquidated damage is a remedy that is used in order to reward a party with the sum of money to cover a loss. A person can only use this remedy if the agreed sum of money is stated within the contract between the two parties. The sum must accurately reflect the position of both parties and be sufficient to cover the loss incurred. The assessment of the loss can take into consideration such things as the amount of time and effort put into the procedure. These can be for such things as holiday bookings and cancellations whereby people pay a certain amount as a deposit which is non-refundable to help compensate for the time and effort put into finding and making the booking for the holiday.

In relation to the Rocky Tops scenario, Weathering Heights were supposed to deliver the climbing goods to Rocky Tops on the 1st February 2012 however they did not deliver the goods until the 7th of March when Rocky Tops had opened their business six days prior to this date. As Rocky Tops did not have any equipment to sell or use this means they could have potentially lost out on six days wages and profits that could be made on these days. This remedy could be used by Weathering Heights in order to compensate Rocky Tops for their losses. They should be able to claim for the late delivery of the goods and also for the money that they lost out on for the six days as interest.

Unliquidated damages

This type of remedy is to make sure the person that is left in the lurch is then left at in no disadvantage at all. This is basically to restore the person back to the position that they would have been in after the contract had been carried out correctly. This remedy is only used when there has been no agreement in prior to