Damages are money to compensate for all the damage caused by the breach of contract. This remedy can be regulated for almost all types of contracts and all types of breaches. Although in the event of a breach, the plaintiff must indicate in his action the damages he claims, it is up to the court to decide what type of damages the plaintiff should receive, if any. The court considers several factors in this decision. Damages, as the name suggests, are intended to compensate the injured party for the loss or damage. Punitive damages are awarded to punish an offender. There are other modifying terms that precede the word damages, such as “lump sum damages” (contractual damages) and “nominal damages” (the court awarding a nominal amount such as a dollar). For some types of violations, the laws stipulate that the winning parties must receive a multiple of their “actual harm” – for example, three damages. 1. Damages. Damages (also known as “actual damages”) cover damages suffered by the non-infringing party as a result of the breach of contract. The amount awarded is intended to compensate for or replace the loss caused by the breach. There are two types of damages to which the non-injured party may be entitled: A.
General damages. General damage covers damage caused directly and necessarily by the breach of contract. General damages are the most common type of compensation awarded for infringements. Example: Company A supplied the wrong type of furniture to Company B. After Company B discovered the virus later in the day, it insisted that Company A pick up the wrong furniture and deliver the right furniture. Company A refused to pick up the furniture and said it could not deliver the right furniture because it was not in stock. Company B successfully filed a lawsuit for breach of contract. General damages for this breach could include: • reimbursement of an amount paid in advance by Company B for the furniture; plus • Reimbursement of expenses incurred by Company B for the return of the furniture to Company A; plus • Payment of any increase in costs incurred by Company B for the purchase of the good furniture or its next consideration from another seller.B.
Special damages. Special damages (also known as “consequential damages”) include all damages caused by breach of contract due to special circumstances or conditions that are not normally foreseeable. These are actual losses caused by the breach, but not directly and immediately. To receive compensation for this type of loss, the non-infringing party must prove that it was aware of the particular circumstances or requirements at the time of the conclusion of the contract. Example: In the above scenario, if Company A knew that Company B needed the new furniture on a given day because its old furniture had to be taken away the day before, damages for breach of contract could include all damages awarded in the above scenario, plus: • Payment of Company B`s cost for renting furniture until the right furniture arrives. Although courts generally maintain lump-sum indemnification clauses, they may ignore them if the amount of lump-sum damages is significantly lower or higher than the value of the actual damage suffered by the plaintiff. This is damage resulting from the normal, natural and probable course of events in the event of a breach of contract. For example, if Party A agreed to sell the grain to Part B for $20 per bag, with payment to be made at the time of delivery, but the market price at the time of delivery increased to $25 per bag and Part B therefore refused to sell for just under $25 per bag, Party A can then claim damages in the amount of $5 per bag.
Although “damages” generally refer to money awarded to a party who has suffered loss or damage, there are different types of monetary remedies in the legal system. Some types of damages that are usually awarded in a breach of contract case are: Lump sum damages are a certain amount that the parties agree in the contract as compensation for a breach. An injunction can be permanent or temporary. Injunctions are often ordered while the dispute is ongoing to avoid potential harm. For example, in a dispute concerning a breach of a non-compete obligation, a court could order the defendant to cease the allegedly competitive activity until the action is settled. A permanent injunction, as the name suggests, is permanent. A judge may issue a permanent injunction as part of his or her final decision in a dispute. “Reimbursement” as a contractual remedy means that the non-infringing party is returned to the situation in which it found itself prior to the breach, while the “termination” of the Contract invalidates the Contract and releases all parties from any obligation under the Contract. Pecuniary damages are usually preferred to a specific service as a remedy in the event of a breach of contract. However, a special benefit may be available if you are not adequately compensated.
For example, they may refer to a contract for something that is unique and cannot be easily replaced. There are certain circumstances in which no compensation is available. State laws could limit the amount of compensation a plaintiff can receive in the event of a non-contractual claim. In addition, the parties may waive their claims for damages in a provision contained in the contract. Sometimes a contract lists specific and specific damages that can be recovered in the event of a breach. This is referred to as lump sum damages. Generally, the only lump sum damages that can be incurred in a business case are those that are reasonably calculated estimates of losses that would have been (and have been) incurred as a result of a breach. Expected damages – also known as general damages – are those that result directly from the breach of contract. Nevertheless, the reliability of the damage is low, since in practice they require a high burden of proof. In court, the plaintiff must determine the exact number of losses due to documents such as contracts, invoices, etc. and an estimate of losses is usually not allowed, which can be quite impractical for certain types of losses. For example, in the event that Company A does not deliver the goods to Company B, Company B may claim the cost of purchasing the goods from another third party using the relevant contracts and invoices.
For loss of profits and business interruptions caused by the breach of contract by Company A; Time spent by Company B looking for another supplier; These losses are often difficult to calculate and prove in certain figures and may not be claimed in practice. In addition, legal fees and other legal fees are usually not approved by the court in Vietnam. Therefore, damages alone will never fully compensate for the plaintiff`s losses. In a perfect world, commercial contracts would be concluded, both parties would benefit and be satisfied with the outcome, and no dispute would arise. But in the real world of business, there are delays, financial problems can arise, and other unexpected events can occur to hinder or even prevent the performance of a written contract, and one party sues the other.