Statutory Damages in Breach of Contract Cases

A breach of contract occurs when either party fails to meet the standards set by their signed agreement. Before a court can rule on a breach of contract, you must show that:

• A valid contract exists;
• As a party to the contract, you performed the obligations set for you;
• If you failed to perform your contractual duty, you have a legal excuse for not doing so;
• The parties failed to fulfill any of the terms outlined in the contract;
• As a result of this, you suffered damages and did not receive the goods or services promised; and
• This caused a breach of contract.

For a valid contract to exist, you need to demonstrate that you and the other party formed a legally binding contract. After, you need to prove that the other party failed to fulfill their contractual obligations causing a breach in the agreement. Furthermore, you need to show that the terms breached are material to the contract. This means that not adhering to that term in that agreement heavily impacted you as a business, and you suffered losses. Moreover, the losses resulted in a negative business outcome for you.

A breach of contract happens when one or more of the parties to a contract fails to fulfill a promise that they made in the contract, as stated earlier. The main distinction between failing to perform on the contract and breach is whether or not the party has a valid legal excuse not to perform on the contract.

Additionally, the term “breach of contract” refers to what the law coins as a “cause of action.” This is a legal concept that allows you to bring a suit in court based on the wrong that was done to you under the contract. When one party breaches a contract, and the other party wants compensation or some other remedy from the civil justice system, the wronged party can file a complaint with the court against the other for “breach of contract.”

How Is a Contract Breached?

Not all breaches are considered material, meaning they do not have a significant impact on the agreement itself. A breach of contract may be either minor or material, and the remedies provided will be based on which type of breach occurred. A minor breach of contract is a comparatively insignificant breach of a contract.

A breach is considered minor when the breaching party fails to perform some aspect of the contract, but the other party continues to receive the item or service specified in the contract. For example, if no time was specified in terms of the agreement, then having the goods delivered anytime during that time will be considered valid. However, if the contract specifies a given time, then failing to abide by it will result in a breach of contract. Also, a short delay can be considered minor by the court as long as it does not alter the agreement to a great degree.

Judges will examine each case closely and determine whether or not the breach is material or minor based on the facts presented. When a breach is minor, the wronged party needs to fulfill its promises under the contract, but it may recover any monetary damages it suffers from the breach.

A material breach of contract is referred to as a significant breach of an agreement. The primary distinction in figuring out whether or not the breach is minor or material is that the other party receives either nothing at all or something significantly different than what the contract outlined. When a breach is material, the wronged party is not obliged to fulfill its promises under the contract. They can seek compensation for breach of the entire agreement as needed for their losses caused by the incident.

What Factors Are Used in Court to Determine Whether the Breach Is Material or Minor?

The courts follow certain procedures in contract laws. Depending on each case and its jurisdiction, the judge will decide whether or not the actions constituted breaches of the contract. Some of the factors that the court will consider in determining whether a breach is material or merely minor include:

• The extent of benefit gained by the wronged party from the contract;
• The amount of damages that can be awarded to the wronged party;
• The fulfilled promises of the breached party under the contract;
• The intent of the breaching party, whether or not it was deliberate or negligent in breaking its promises under the contract;
• Does the breaching party have the ability to complete the remaining obligations under the contract?

Statutory damages are considered the standard payments that compensate for injuries, losses, or civil violations. These statutory damages encompass the following:

• Creates a way for the plaintiffs to vindicate their rights;
• Push lawsuits timeline ahead since they do not require much proof as actual damages;
• Offer both a punitive and compensatory resolution.

What Are the Statutory Damages in a Breach of Contract?

Each jurisdiction has state statutes that govern what is considered statutory damage. It is known as the civil fine and punishment resulting from a contract law dispute. Therefore, the amounts and guidelines can be among the local jurisdictions. Cases that commonly result in statutory damages include breaches of intellectual property or copyright law, public policy violations, and tax evasion. Courts also protect consumer rights and civil rights.

Below are some common statutes and statutory damages that stem from contract disputes:

• Anti-Counterfeiting Consumer Protection Act, which awards damages for selling or making counterfeit goods;
• Anti-Cybersquatting Consumer Protection Act sets damages for pirating a domain name;
• The Cable Piracy Act grants damages for pirating cable communications that range from $1,000 to $100,000. This extends to cable providers who violate privacy and disclosure requirements;
• Copyright Act grants statutory damages for copyright violations ranging from $750 to $30,000;
• Fair and Accurate Credit Transactions Act that provides damages for failing to comply with disclosure requirements or using pretenses to obtain a credit report can bring statutory damages of up to $1,000;
• Fair Debt Collection Practices Act provides damages for debt collection violations of up to $1,000 per day;
• Stored Communications Act grants damages for violating electronic privacy that begin at $1,000. Plaintiffs can also sue for actual damages;
• Lanham Act provides damages for trademark violations, including unfair competition, infringement, and willful dilution, ranging from $1,000 to $250,000;
• Truth in Lending Act grants damages for a lending violation that is linked to the lender’s financing charges.

The majority of the statutes stated above protect the rights of consumers through goods and services. In every state, as stated earlier, statutory damages are available for certain claims to ensure that it is easier for consumers to file a claim. The purpose of these statutes is to protect the consumer and provide them with a fair market. Due to the hyper-social online environment in which businesses thrive today, it is highly critical to protect the privacy of users.

When Do I Need to Contact a Lawyer?

Statutory damages exist for contract cases, and each jurisdiction has a set of them. If you need assistance with determining what is considered a statutory liability in a contract, reach out to a local contract lawyer to assist you. Depending on your case, you may be able to receive compensation for your losses through the statute in place.