Understanding Damages and Mitigation in Breach of Contract Claims

Definitions/Descriptions

Task:

The damages that might result from a breach of contract by either party can be significant and disruptive; however, employees are often unaware of the potential costs associated with a breach of contract.  Thus, it is critical that members of the department understand the various types of damages that can flow from a breach of contract, together with the legal obligation to mitigate damages caused by the other party’s breach of contract. 

A.Definitions/Descriptions:
1. The purpose of damages in a breach of contract claim, as opposed to the purpose of damages in a tort claim, can be described as:  

2. Because punitive damages generally exceed this purpose, punitive damages  are only available in a breach of contract claim under the following limited circumstances: 

3. The major types of damages available in breach of contract claims are described below, together with the circumstances under which they are available:  

4. Mitigation, and why it is required in breach of contract claims, is best explained as follows: 

B.Identification of The Types of Contractual Damages and Mitigation Most Likely To Be Relevant to Department:  
1.The following types of damages would likely arise if our department breaches contracts to which it is either a party or as to which the department acts on behalf of the company:  

2. The following options are available to help prevent our department from breaching the contracts to which it is either a party or as to which the department acts on behalf of the company: 

3. The following types of damages would likely arise if the other party breaches contracts to which our department is either a party or as to which the department acts on behalf of the company:  

4. The following options are available to mitigate damages in the event the other party breaches contracts to which our department is either a party or as to which the department acts on behalf of the company: 

C.Suggested Protocols to Minimize Potential Liability Related to Contractual Damages:
1. We will implement the following specific protocols to limit the possibility that our department will breach a contract to which it is a party or as to which the department acts on behalf of the company:  
 
2. We will implement the following specific protocols for the development of  contingency plans in the event the other party breaches a contract: 

3.We will implement the following specific protocols to ensure mitigation in the event our department breaches a contract to which it is a party or as to which the department acts on behalf of the company:  

D.Training Methods Related to Contractual Damages:
1.The following specific training methods will be used to help members of the department understand the protocols and to guard against unintended potential legal liability related to circumstances that would incur various types of damages:

2. The following specific training methods will be used to help members of the department understand the protocols and to guard against unintended potential legal liability related to the failure to mitigate damages: 

3.The following specific training methods will be used to help members of the department develop strategies to avoid breaching contracts and to spot the possibility that the other party might breach the contract.