What types of damages are recoverable for the breach of a contract? The answer isn't always simple. Sometimes, the contract may provide for a specific remedy in the event of a breach. However, the contract may also be silent on the types of recoverable damages. Florida law also provides for different types of recoverable damages depending on the nature of the contract at issue. For example, certain damages may be recoverable for the breach of a contract to construct improvements on real property or for the sale of real property. Generally speaking, however, the following types of damages may be recoverable upon proof of the breach of a contract:
Compensatory damages: Compensatory damages is that amount of money which will put the plaintiff in as good a position as it would have been if the defendant had not breached the contract and which naturally result from the breach.
Special damages: Special damages is that amount of money which will compensate the plaintiff for those damages which do not normally result from the breach of contract. To recover special damages, the plaintiff must prove that when the parties made the contract, the defendant knew or reasonably should have known of the special circumstances leading to such damages.
Nominal damages: If a judge or jury decides that the defendant breached the contract but also that the plaintiff did not prove any loss or damage, the judge or jury may still award the plaintiff nominal damages, such as one dollar.
Lost profits: To be entitled to recover lost profits, the plaintiff must prove both of the following: 1. The defendant's actions caused the plaintiff to lose profits; and 2. The plaintiff can establish the amount of its lost profits with reasonable certainty. For the plaintiff to establish the amount of its lost profits with reasonable certainty, it must prove that a reasonable person would be satisfied that the amount of lost profits which it may be entitled to recover is not simply the result of speculation or guessing. Instead, the plaintiff must prove that there is some standard by which the amount of lost profits may be established. The plaintiff does not have to be able to prove that the amount of lost profits can be calculated with mathematical precision as long as it has shown there is a reasonable basis for determining the amount of the loss. Moreover, even though the plaintiff's business is not established or does not have a "track record," it still may be able to establish the amount of lost profits which it may be entitled to recover if it proves that there is some standard by which the amount of lost profits may be established.
Damages for complete destruction of a business: If the plaintiff proves that the defendant completely destroyed the plaintiff's business, then a judge or jury must award the plaintiff's damages based upon the market value of the plaintiff's business on the date that the plaintiff's business was destroyed.
In addition to providing for certain types of recoverable damages, certain legal doctrines may serve to minimize or reduce the amount of damages. Such doctrines include:
Mitigation of damages: If the defendant breached the contract and the breach caused damages, the plaintiff is not entitled to recover for those damages which the defendant proves the plaintiff could have avoided with reasonable efforts or expenditures. The judge or jury should consider the reasonableness of the plaintiff's efforts in light of the circumstances facing it at the time, including its ability to make the efforts or expenditures without undue risk or burden. If the plaintiff made reasonable efforts to avoid the damages caused by the breach, then the judge's or jury's award should include reasonable amounts that it spent for this purpose.
Present cash value for future damages: Any amount of damages awarded for future damages should be reduced to its present money value and only the present money value of these future damages should be included in the verdict. The present money value of future damages is the sum of money needed now which, together with what that sum will earn in the future, will compensate the plaintiff for these damages as they are actually experienced in future years.