Breach of Contract in New Jersey: What Remedies Are Available?

Breach of Contract in New Jersey: What Remedies Are Available?

When one party fails to perform its obligations under a contract, the law recognizes that the other party is entitled to a remedy. In New Jersey, the remedies for breach of contract are not limited to one option. The courts evaluate the circumstances and award relief that is appropriate to the harm caused. Business owners and individuals alike must understand these remedies because they determine what can realistically be recovered in litigation.

The most common remedy is compensatory damages. These are designed to place the non-breaching party in the position they would have occupied had the contract been performed. For example, if a supplier fails to deliver goods and the buyer must purchase substitutes at a higher cost, the breaching party may be liable for the difference. Courts in New Jersey do not award windfalls. They award amounts that directly compensate for the loss.

Another remedy is consequential damages. These extend beyond the immediate value of the contract to cover losses that were reasonably foreseeable at the time the agreement was made. If a contractor fails to complete a project on time and the delay causes the owner to lose rental income, those lost rents may be recoverable. The key is foreseeability. Damages that could not reasonably have been anticipated are not awarded.

Specific performance is another form of relief, though less common. In certain cases, money alone is not sufficient to remedy the breach. Real estate transactions provide the clearest example. Because every parcel of land is considered unique, a buyer may sue to compel the seller to transfer the property rather than simply recover damages. Courts will only grant specific performance when the subject of the contract cannot be replaced by money damages.

Rescission is a further remedy, where the contract is cancelled and both parties are restored to their pre-contract positions. This remedy is appropriate where the contract was induced by fraud, mistake, or where performance has become impossible. Rescission unwinds the agreement and relieves both sides of further obligations.

New Jersey also recognizes liquidated damages provisions, where the parties pre-determine the damages in the event of breach. Courts will enforce these clauses if they represent a reasonable forecast of damages at the time of contracting. They will not enforce them if they are punitive. I frequently see disputes over liquidated damages in commercial leases and franchise agreements.

The choice of remedy depends on the facts, the terms of the contract, and the nature of the breach. In practice, most breach of contract cases result in compensatory damages, but litigants must be prepared for the court to consider other forms of relief. The lesson is that contracts must be drafted with these remedies in mind, and parties should enter litigation with realistic expectations about what they may recover.

For more information about your legal rights or to schedule a consultation, please contact the Law Offices of Peter J. Lamont at www.pjlesq.com, call 201-904-2211, or email info@pjlesq.com.

Contact us today to discuss your business or legal matter. Put our 20+ years of legal experience to work for you.

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For detailed insights and legal assistance on topics discussed in this post, including litigation, contact the Law Offices of Peter J. Lamont at our Bergen County Office. We're here to answer your questions and provide legal advice. Contact us at (201) 904-2211 or email us at  info@pjlesq.com.

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About Peter J. Lamont, Esq.

Peter J. Lamont is a nationally recognized attorney with significant experience in business, contract, litigation, and real estate law. With over two decades of legal practice, he has represented a wide array of businesses, including large international corporations. Peter is known for his practical legal and business advice, prioritizing efficient and cost-effective solutions for his clients.

Peter has an Avvo 10.0 Rating and has been acknowledged as one of America's Most Honored Lawyers since 2011. 201 Magazine and Lawyers of Distinction have also recognized him for being one of the top business and litigation attorneys in New Jersey. His commitment to his clients and the legal community is further evidenced by his active role as a speaker, lecturer, and published author in various legal and business publications.

As the founder of the Law Offices of Peter J. Lamont, Peter brings his Wall Street experience and client-focused approach to New Jersey, offering personalized legal services that align with each client's unique needs and goals​.

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