What type of compensation is awarded for a breach of contract?

Monetary damages are awarded for a breach of contract to compensate the injured party for the loss suffered due to the breach. This form of compensation aims to restore the non-breaching party to the position they would have been in had the contract been fulfilled. There are various types of monetary damages, such as compensatory damages, which cover direct losses, and consequential damages, which account for indirect losses resulting from the breach.

Specific performance, liquidated damages, and mutual rescission are other remedies that may be available in different circumstances but do not primarily focus on providing monetary compensation for a breach. Specific performance requires the breaching party to fulfill their obligations as outlined in the contract rather than providing money. Liquidated damages refer to pre-determined amounts that parties agree upon in the contract, typically used to avoid disputes over how much is owed upon a breach but are considered part of the broader category of monetary damages. Mutual rescission involves the cancellation of the contract, which neither party is held to perform, again not providing direct financial compensation like monetary damages would.