Legal remedies and equitable remedies are two different forms of relief that a party can seek in the event of a breach of contract. Legal remedies are typically monetary damages awarded by a court, while equitable remedies are more flexible and can include a variety of actions such as injunctions or specific performance. In this article, we will explore the difference between legal remedies and equitable remedies for breach of contract on Quizlet.
Legal remedies are a type of relief that can be awarded by a court to compensate the aggrieved party for losses suffered as a result of a breach of contract. The purpose of legal remedies is to put the injured party in the position they would have been in if the contract had been fulfilled as agreed upon. There are three main types of legal remedies:
1. Compensatory Damages – These are damages awarded to compensate the aggrieved party for any losses they suffered as a direct result of the breach. The purpose of compensatory damages is to restore the plaintiff to the position they were in before the breach occurred.
2. Consequential Damages – These are damages awarded to compensate the aggrieved party for any losses they suffered as a result of the breach, but that were not directly caused by the breach. For example, if a supplier breaches a contract to provide goods to a retailer, the retailer may suffer lost profits as a result. Those lost profits would be considered consequential damages.
3. Punitive Damages – These are damages awarded to punish the breaching party for their conduct. Punitive damages are not typically awarded in breach of contract cases, except in cases where there has been fraud or intentional misconduct.
Equitable remedies are a type of relief that a court can grant to a party in order to prevent future harm or to compel performance of a duty. Equitable remedies are typically used when monetary damages are insufficient to make the aggrieved party whole. There are several types of equitable remedies:
1. Injunctions – An injunction is a court order that prohibits a party from taking a certain action or requires them to perform a certain action. For example, if a company is using trade secrets that it obtained from a former employee, the former employer may seek an injunction to prevent the company from continuing to use those trade secrets.
2. Specific Performance – Specific performance is an equitable remedy that requires a party to perform a specific duty outlined in the contract. This is typically used when the subject matter of the contract is unique, such as a piece of artwork or a specific parcel of land.
3. Rescission – Rescission is an equitable remedy that allows a party to cancel a contract that has already been executed. This is typically used when one party has been induced to enter into a contract through fraud, duress, or mistake.
In conclusion, legal remedies and equitable remedies are two different forms of relief that parties can seek in the event of a breach of contract. Legal remedies typically involve monetary damages, while equitable remedies are more flexible and can include a variety of actions such as injunctions or specific performance. It is important to understand the difference between these two types of remedies when drafting or entering into a contract as different types of breaches can require different types of remedies.