Damages in a Contract Case

You have a contract. The other party failed to perform his or her responsibilities under the contract.  As a result, you are entitled to damages in a lawsuit, right?

Not necessarily. You can only recover damages in a breach of contract lawsuit if you suffered damages as a result of the breach of contract.  As a business litigation lawyer, Memphis, TN trusts time and time again in breach of contract cases, we’d like to share with you the basics of proving damages in a breach of contract case.

What is the measure of damages in a contract case?

Damages in a breach of contract case represents payment for actual losses caused by the breach of contract.   You are only entitled to be put in the same position you would have been in if the contract had been performed. In other words, you can’t profit from a breach of contract. In addition, in most states, punitive damages are not recoverable, and neither are damages for mental anguish, stress, or damage to reputation.

Example: In a breach of employment contract case, the contract damages might be the salary that a person would have earned had the employer not breached the contract.

Damages can’t be speculative or uncertain.

You have the burden of proving your contract damages. Without sufficient proof of damages, there can be no monetary award – even if there is a clear breach of contract by the other party. 

You can’t recover uncertain, contingent, or speculative damages. Although you don’t have to prove damages with mathematical certainty, damages will be considered uncertain or speculative when their existence is uncertain, or when the proof is insufficient to allow the judge or jury to make a fair and reasonable assessment of damages. For example, you can’t just make broad statements like, “my business probably suffered” or “I spent a lot of money trying to fix this” or “this put me way behind in my work schedule and probably caused me to lose clients.”

How to Prove Contract Damages

Document. Document. Document.  If you spent or lost money as a result of a breach of contract, you should be able to prove this not only by your testimony but also with receipts or other documents.  This may require some work on your part in gathering the information your attorney will need to prove your damages in court. However, it is necessary work because general statements will not be enough.

If you need help with a breach of contract case, or with any other business litigation matter, contact the trusted business litigation lawyer Memphis, TN consistently counts on.

Wiseman BrayThanks to our friends and contributors at Wiseman Bray PLLC who have significant experience in business litigation.