How to Calculate Monetary Damages in a Contract Dispute
What are monetary damages in a contract dispute?
When Joe fails to mow Sam's lawn and Sam has to hire another person at a higher cost, what can Sam recover?
Answer:
Sam can recover monetary damages from Joe.
Monetary damages in a contract dispute refer to the compensation awarded to the non-breaching party to cover the financial loss suffered due to the breach of contract. In the scenario where Joe fails to fulfill his obligation of mowing Sam's lawn and Sam has to incur additional expenses by hiring someone else, Sam is entitled to recover monetary damages.
Monetary damages may include compensation for the actual cost incurred by Sam in hiring another person to mow the lawn, as well as any other financial losses directly resulting from Joe's breach of contract. It aims to place Sam in the position he would have been in had the contract been performed as agreed.
Various types of monetary damages that Sam can recover from Joe in this situation include:
- Nominal damages: Symbolic damages awarded when no actual loss has been suffered.
- Compensatory damages: Aim to compensate Sam for the actual financial loss incurred.
- Liquidated damages: Pre-determined damages specified in the contract in case of breach.