Digital MarketingUnraveling the Complexities of Employment Contract Breaches

Unraveling the Complexities of Employment Contract Breaches

Employment contracts contain complex rules that must be strictly observed; however, unforseen events or human error could lead to breaching these agreements without intending it.

Preventing breaches requires careful drafting of contracts and regular communication between parties involved. Negotiation, arbitration and mediation can help maintain professional relationships while protecting against breaches.

Remedy for a Breach of Contract

When breach of employment contract arise, various legal and equitable remedies may be utilized. Specific performance involves court orders mandating that breaching parties fulfill their contractual obligations as agreed in their contract – this remedy typically is granted when its subject matter is unique or rare and replacing it would be difficult.

Damages may also be awarded in cases of breach of contract. Compensatory damages are given when an act deprives one party from receiving what was promised under their agreement; liquidated damages (pre-determined amounts outlined in a contract itself) or nominal damages may also be awarded as token awards to compensate non-breaching parties, although proof must still be provided of losses suffered; punitive damages can even be awarded when serious breaches occur.

Damages for a Breach of Contract

When one party breaches a contract, they can be held liable for damages to the non-breaching party. Damages may take many forms; compensatory damages to compensate directly for losses sustained and consequential damages to address indirect or foreseeable harm may both apply.

Compensatory damages are meant to put non-breaching parties back in the same position they would have been in had their contract been fulfilled, or at least close. Expectation damages, which are calculated using what you expected from breach, can also be easy to calculate.

Consequential damages are more complicated to calculate and can vary based on many different factors. They could include expenses related to mitigating the effects of breach, such as hiring an outside contractor to replace services lost as a result. Additional compensatory damages could include emotional distress and punitive damages – although these latter types of awards are rarely given out.

Liquidated Damages

Liquidated damages (also referred to as liquidated and ascertained damages) are sums of money agreed upon between contracting parties to be assessed against those who breach, in order to bring tangible value and make losses more palpable. Liquidated damages clauses exist within certain legal contracts which specify an amount which one party will owe another upon breach and are meant as preventative measures that help avoid legal claims from being lodged by others.

In creating contracts containing liquidated damages provisions, both parties should make every attempt to estimate their potential loss should there be any breach. If liquidated damages agreed upon are grossly out of proportion with what could reasonably be expected as harm from breach, courts are likely to strike down such provisions as unenforceable penalties that violate public policy – this may even render entire contracts invalid (see Restatement (Second) of Contracts 356.2 for more).

Alternative Dispute Resolution

Employees who believe they have been the victims of breach of contract have several options open to them in terms of resolution – mediation is one such alternative dispute resolution method that may provide relief.

Employment law experts frequently encourage workers to explore alternative means of resolving an infraction before taking legal action, as such resolution can often be less stressful and more cost-effective for both parties involved.

The DOJ Mediator Corps Program’s network of 110 collateral duty mediators from all its Equal Opportunity Offices serves as an effective and cost-efficient method to address and, where possible, resolve pre-complaint and formal EEO complaints. This informal program meets federal mandates for agencies to establish an alternative dispute resolution program.