Compensatory damages in breach of contract claims

| Feb 12, 2021 | Business Litigation |

Contracts form the backbone of many business dealings in Ohio, but what happens if one party fails to meet their obligations as agreed upon? When this happens, the aggrieved party may choose to pursue a breach of contract claim in order to obtain damages. The main type of damages sought are compensatory damages. There are two types of compensatory damages that may be awarded to the nonbreaching party: general damages and special damages.

General damages

General damages cover what the nonbreaching party directly lost due to the breach. It is intended to make good on the promise or replace the loss. For example, general damages could include a refund of prepayment made by the nonbreaching party, reimbursement for expenses incurred due to the breach, and payment for any increase in cost the nonbreaching party incurred by having to obtain what they agreed to from another party.

Special damages

Special damages are losses the nonbreaching party incurs do to circumstances that are generally not predictable. These are actual losses, but they may be indirect. To be awarded special damages, the nonbreaching party must show that the breaching party knew of the special circumstances or requirements when the agreement was made.

Learn more about breach of contract

These are only two examples of the types of damages that may be sought in a breach of contract claim; there are others. This post is for informational purposes only and does not contain legal advice. Readers can visit our firm’s website to learn more about business litigation in Ohio.