Businesses in Illinois enter into contracts every day with the expectation that each side will hold up to their end of the deal. Contracts form the backbone of many business dealings, but things do not always run smoothly and sometimes a party ends up breaching the contract. When that happens, the non-breaching party may want to pursue damages. In general, compensatory damages are sought. Also referred to as “actual damages,” compensatory damages are meant to cover the loss the non-breaching party suffered due to the breach. There are two types of compensatory damages: general damages and special damages.
General damages are awarded to cover the loss the non-breaching party suffered due to the breach. Some ways general damages can compensate a party is by refunding amounts prepaid for, reimbursing for expenses incurred, and paying for the increase in the costs necessary to obtain what was sought in the contract.
Special damages are also referred to as “consequential damages.” They are meant to cover losses that were caused indirectly by the breach. To be awarded special damages, the non-breaching party must show that the breaching party knew when entering the agreement that special circumstances or requirements existed.
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Breach of contract claims are complicated. General damages and special damages are only two remedies that may be sought; there are others. This post is for educational purposes only and does not contain legal advice. Those who want to learn more about their rights and options can explore our firm’s website for further information.