Contracts are a normal part of doing business now, because (when well drafted, executed, and properly utilized) they can make it possible to do business clearly and safely. A well-drafted contract should clearly lay out the agreements being made by both parties, including the expectations and criteria to be met and the consequences in the event of a breach. In general, in order to give rise to damages under Florida law, there must be a valid legal contract in place that has been materially breached such that it caused financial harm. The fact that the breach must usually be material in order to give rise to damages is unique under Florida law. All 49 other states do not require a contractual breach to be material in order to give rise to damages.
Determining a Material Breach
In order to determine whether a breach is material, it’s critical to evaluate the facts of the case. Hypothetically, if a baker ordered ten bags of flour to be delivered on Monday evening, and they weren’t delivered until Tuesday morning, this may or may not be a material breach. For instance, if the contract specified that time was of the essence and that the flour must arrive Monday night, this may be found to be material. Particularly if the baker had ordered the flour to be delivered Monday evening so that it could be used to fulfil a bakery order Tuesday morning. In that case, the flour failing to be delivered on Monday night as specified in the contract, would likely result in financial damage due to being unable to fulfil the Tuesday morning order of baked goods. This would likely be found to be material and, depending on the specific terms of the contract, the baker may not need to pay for the flour, or the flour provider may be financially liable for the lost income.
Available Remedies for Florida Breach of Contract
When one party breaches a contract, the other party is entitled to a remedy under Florida law. Remedies are designed to compensate the non-breaching party for the harm caused by the breach, compel performance of the contract where compensation would be insufficient, or cancel the contract and provide restitution in the event that the non-breaching party provided a benefit to the breaching party.
Financial Remedies for Breach of Contract
There are a number of forms of financial damages available to those who have suffered a breach of contract. Compensatory damages are likely the most common form of breach-of-contract damages. Compensatory damages are intended to put the non-breaching party back in the position they would have been in financially had the breach not occurred. For instance, in the baker and flour example above, if the Tuesday morning bakery order was $500, and the baker was unable to fulfill the order because of the delayed flour shipment, the compensatory damages would be $500 (perhaps minus the cost of the flour, depending on the terms of the contract). This is because, had the terms of the contract not been breached and the flour arrived on time, the baker would have received $500.
If the non-breaching party cannot prove that any financial harm was suffered as a result of the breach, they may still qualify for nominal damages or liquidated damages. Liquidated damages are specified in the contract. For instance, a contract may stipulate that delayed delivery may result in liquidated damages of $300 per instance. Liquidated damages should be a reasonable estimate of the actual harm that would result from the breach. So a baker including a liquidated damages clause of $5,000 for late deliveries would likely not be upheld.
Finally, punitive damages are also an option. Punitive damages are intended to penalize a party for their grossly negligent, reckless, or intentionally harmful behavior toward another party.
Schedule a Consultation
If you have experienced financial damage as a result of another party unfairly breaching a valid Florida contract or legal agreement, the Law Offices of Larry E. Bray, P.A., are here to help. Schedule a free consultation today to find out how West Palm Beach breach of contract lawyer Larry Bray can help you get the representation and compensation that you are entitled to.
