If you breach a contract and the matter goes to court, you may be ordered:
- To pay damages to the other party, or
- To perform your obligations under the contract (also called ‘specific performance’).
Some contracts may specify what payments will be payable if there is a breach by one party of a particular contractual obligation - this is often called ‘liquidated damages’. As long as this agreed sum is a genuine pre-estimate of the damage likely to be caused by the relevant breach, a court can enforce it. However, a court will not enforce it if the agreed sum is significantly greater than the cost of the damage and considered unconscionable.