Video: Remedies for a Breach of Contract

In this lesson, Nick Palazzolo, CPA, unpacks various remedies available for breach of contract, focusing on compensating the non-breaching party to restore their position. He simplifies the complex topic with a relatable car repair analogy to bring the concept home. From consequential damages to specific performance, Nick explains each remedy, including liquidated damages and the scenarios when punitive damages are applicable. Furthermore, he addresses contract rescission and dives into the limitations on monetary damages, covering foreseeability and the duty to mitigate losses. This engaging exploration equips you with a clear understanding of how the legal system aims to rectify contractual wrongs.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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What are some remedies? So you've had your contract breached, you've had some issues in all of this. What can you do to kind of remedy the situation? Well, remedies here are aimed to compensate the non-breaching party and restore them to the position that they would have been in if the contract had been performed as agreed. Various remedies are available depending on the specific circumstances of the breach. Now, I would say a good example to think of in this case is I got to take my car into the shop to get the brakes fixed and they mess up the brakes. They make them even worse or they mess up the engine, something like that. That would be a great example to think of as we run through all of these. Generally, we're not gonna have punitive damages as we'll see, we're not gonna try to, the courts aren't gonna punish the dealership, they're just going to get the mechanic or whoever it is to get your car to the position it would have been in otherwise if those damages hadn't been done. That also may include paying you because maybe you couldn't drive to work at that point because it was past the time that they promised they'd get you the car. Not to go into too much specifics but whatever it takes to get you to the position you would have been in if they didn't harm you. First off, we've got compensatory damages. These award the non-breaching party enough money to obtain a substitute performance. They are intended to put the non-breaching party in the same position they would have been in if the contract had been performed as agreed. So just whatever it takes to get the car fixed, maybe they send the

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