Whether an Illinois business is accused of breach of contract, or it is the one claiming another party broke its promises, there could be a great deal of money at stake. The circumstances of the alleged breach determine how much the plaintiff might claim in damages.
One form of breach of contract damages under the law is known as expectation damages. Say your business signs a contract with a customer to perform services in exchange for payment. You do the work, but the client does not pay as promised. The amount of money the client previously promised to pay would be your expectation damages.
Sometimes, both parties will perform as they agreed under the contract for a while, then one party will suddenly repudiate the contract or try to cancel it. Since neither party has completely fulfilled its obligations, the nonbreaching party is not entitled to the full value of the breaching party’s promise. Instead, they are entitled to partial performance, which is the value of the work the nonbreaching party did prior to the breach.
Another commonly claimed form of damages is called opportunity cost. This refers to allegedly lost opportunities for other contracts due to the fact that the plaintiff signed the breached contract.
Finally, many parties seek to reduce their potential liability by including a clause in the contract outlining what the damages would be if either party breaches the contract. This is known as liquidated damages. However, courts will be suspicious of a liquidated damages clause if it contains punitive damages.