There are many kinds of damages, and generally speaking, damages may be very specific to the kind of breach that has occurred. Following are some guidelines on damages.
- Compensatory damages aim to put the non-breaching party in the position that they had been if the breach had not occurred.
- Nominal damages are token damages awarded when a breach occurred, but no actual money loss to the non-breaching party was proven.
- Liquidated damages are specific damages that were previously identified by the parties in the contract itself, in the event that the contract is breached. Liquidated damages should be a reasonable estimate of actual damages that might result from a breach.
- Punitive damages are payments that the breaching party must make, above and beyond the point that would fully compensate the non-breaching party. Punitive damages are meant to punish a wrongful party for particularly wrongful acts, and are rarely awarded in the business contracts setting.
- Specific performance is best described as the breaching party's court-ordered performance of duty under the contract. Specific performance may be used as a remedy for breach of contract if the subject matter of the agreement is rare or unique, and damages would not suffice to place the non-breaching party in as good a position as they would have been had the breach not occurred.
- Restitution as a contract remedy means that the non-breaching party is put back in the position it was in prior to the breach, while "cancellation" of the contract voids the contract and relieves all parties of any obligation under the agreement.
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