Most members of Denver's small business community know that airtight contracts contribute to the success and growth of a business. As such, these business owners take careful steps to ensure that their contracts are precise and detailed. Unfortunately, entities on the other side of a contract may still choose to violate the terms of such a document.
When someone breaches a contract, the business owner has the right to pursue a legal remedy. Exercising this right serves several functions such as deterring future breaches and compensating the company owner for his or her losses. The types of damages company owners in Colorado may pursue include the following.
- Compensatory damages: This ensures that you recover some or all of the financial losses suffered if another party breaches a business contract.
- Nominal damages: Often, a business owner receives a small monetary award if he or she suffered little or no financial losses after a breach of contract.
- Punitive damages: Rarely, a judge may award punitive damages to punish the party who violated a contract. It also serves as a good way to deter parties from breaching contracts in the future.
- Liquidated damages: Many business contracts include specific provisions to compensate the injured party if another party violates the terms of a contract.
While contracts are critical in protecting the interests of a small business, they require precision and legal accuracy to be as effective as possible. Those who are new to the business world or are having trouble drafting contracts can acquire guidance from a law firm experienced with business and contract law. Ensuring your contracts are airtight can go a long way in helping you succeed in the business world.