What happens if I breach a contract?

If you breach a contract, then you may be liable for compensatory damages. These damages are meant to put the non-breaching party, the one who was not at fault, back into the position they would have been in if the contract had been fulfilled as agreed. Compensatory damages cover financial losses that the non-breaching party suffered as a result of the breach. In addition, the non-breaching party may be able to sue for punitive damages. Punitive damages are meant to punish the breaching party and act as a deterrent for others. Punitive damages are awarded by a court and are more difficult to prove than compensatory damages. In South Dakota, a party who breaches a residential real estate contract may also be subject to attorney’s fees and court costs that the non-breaching party incurs to enforce the contract. Finally, if the breaching party does not follow the court’s orders for breaching a contract, they may be found in contempt of court. This can lead to more serious consequences, such as fines or even jail time, depending on the severity of the breach. It is important to note that all of these potential consequences apply to contracts that are defined under South Dakota law. If the contract is governed by the law of another state, then the consequences could be different.

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