What happens if an employer breaches an employment contract?
Asked by: Blanca Carter | Last update: July 30, 2025Score: 4.8/5 (28 votes)
One of the most immediate consequences of breaching an employment contract is financial liability. If found guilty, employers may be required to pay damages to the affected employee.
What to do when your employer breaches your contract?
You can briefly discuss with a lawyer over the phone/in person for free consultation. Call your local bar association and they will recommend an appropriate law office nearby. In the meantime, start documenting anything you think is a breach of contract on their end.
What are the three consequences of a breach of contract?
Legal Consequences of Breaking a Contract
You may be held liable for monetary damages if you breach a contract. There are three different types of monetary damages: expected damages, reliance damages, and restitution damages. Collectively these are known as “compensatory damages.”
What are damages for breach of employment contract?
When your employer terminates your employment contract, you may sue to recover any financial loss. The money you ask for is referred to as damages. For example, if your employer reveals confidential information contrary to the agreement, you may sue for damages for the breach.
Can I go to jail for breach of contract?
Contract law disputes that end up in court are litigated as civil cases. That is, they involve a disagreement between private parties as opposed to society as a whole. Therefore, someone who breaches a contract will not go to jail for that breach.
What Happens If You Break An Employment Contract? - CountyOffice.org
How much money can you sue for breach of contract?
In a breach of contract case, damages typically cannot exceed four times the actual losses. However, the exact amount depends on the specifics of your case. Consult with a lawyer to determine the potential damages you may recover.
How serious is a breach of contract?
The Legal Consequences of Breaching a Contract
Depending on the severity of the breach, you could be looking at anything from a small fine to jail time. If you're found guilty of breaching a contract, the court will order you to pay damages to the other party.
Can you sue your employee for breach of contract?
For serious breaches, employers may consider legal action to recover damages, particularly if the breach causes financial loss, such as the disclosure of confidential information or violation of restrictive covenants.
Is it worth suing for breach of contract?
The Value of the Contract: Consider whether the breach resulted in substantial financial or other losses. If the damages are minimal, the costs of litigation may outweigh the potential recovery. For example, suing over a minor inconvenience or slight delay may not be worth the effort.
What compensation can you get for breach of contract?
Compensatory Damages
Lost profits, Cost of cover (i.e., obtaining substitute goods or services), Repair or replacement costs, and. Incidental expenses incurred due to the breach.
What is needed to prove a breach of contract?
Collect evidence proving your position
Both sides need to get evidence to prove their side. This could be the contract itself or proof of a verbal agreement, receipts or bills showing expenses, letters, emails, other written communication, pictures, and witness statements.
What are the possible outcomes of a breach of contract?
Legal remedies and damages
The “overarching goal of contract law is to place the harmed party in the same economic position they would have been in had no breach of contract occurred. As a result, the default remedy available for a breach of contract is monetary damages.”
What is the penalty for breaking a contract?
If you successfully take someone to court for breach of contract, the most common remedy is compensatory damages. Usually, a court will order the person who breached the contract to pay you enough money that you can go elsewhere to get the services they failed to provide.
Do I need a lawyer for breach of contract?
Don't hesitate to seek legal help if you think someone may have breached a contract with you, or if you're in the middle of an agreement dispute in California.
What is wrongful termination for breach of contract?
Wrongful termination due to breach of contract happens when an employer fires an employee in a way that breaks the terms of an employment agreement. This agreement could be a written document, like a contract you sign when you start a job, outlining conditions for termination and job duration.
How much can I sue my employer for false promises?
If the employer induces a person to move based on false promises, not only could the employer be held liable for double the damages (double the amount of what the employee would have earned or compensation they missed out on due to the fraudulent inducement of employment), but the employer could also be found guilty of ...
How much money can you get for a breach of contract?
Breach of contract damages generally cannot exceed four times the actual losses, but everything depends on the facts of your specific case. Your lawyer can identify whether you can recover these damages in your case.
What happens if you break your contract of employment?
Employers may pursue legal action against employees who violate their contractual obligations, even if only a single aspect of the agreement is breached. Potential outcomes include monetary damages, professional reputation damage, or strained employer relationships.
How hard is it to win a breach of contract lawsuit?
There is ample opportunity for disappointment, which often leads to breach of contract litigation. While breach of contract happens all the time, very few cases become a winning lawsuit. Long story short, it's hard to win a breach of contract lawsuit.
How to prove an employer breached a contract?
- The existence of a valid contract.
- The plaintiff's performance or willingness to perform under the contract.
- The defendant's failure to perform their obligations under the contract.
- Damages or harm suffered by the plaintiff as a result of the breach.
Can you get in trouble for breach of contract?
Some scenarios where contract breaches may involve criminal activity include: Fraudulent intent: If a party enters into a contract without any intention of fulfilling the terms, this may constitute fraud. For instance, accepting payment for services without any intention of delivering.
How long does an employer have to press charges for theft?
These laws vary by state and the type of crime. For misdemeanor theft, that time period could be a year or two, for example, while felony theft could extend 5+ years for a prosecutor to be able to file.
Is breach of contract hard to prove?
The short answer is yes. Breaches of oral contracts are harder to prove, but the contracts are absolutely enforceable. Breach of oral contract elements are the same as for written contracts. The hardest part of proving a breach of contract for an oral agreement is proving that the contract existed and was valid.
Can you go to jail for a breach of contract?
You can't be thrown in jail for breaking a contract, but you can be sued for “breach of contract” by the other side if they lost money because of your actions (or inactions).
Can you get compensation for breach of contract?
Material breach of contract
Following a material breach, the innocent party may seek legal help to resolve the issue. Legal remedies may include suing for damages and, in some cases, terminating the contract. Open discussions and mediation can help both parties to resolve the situation before it escalates.