Question

Paige is a financial consultant who has entered into a contract to work exclusively for Annie’s company for the next two years at $100,000 per year. Three months into the contract, Annie informs Paige that her services are no longer required because she wishes to take the company in another direction.

Paige is understandably upset and she as a result of this contract refused other work for this role and is not earning any income until she can get another contract elsewhere. She comes to you to see what remedies through the legal system is available to her and what expectation of compensation might she be able to receive?

Answer 1

A contract is a binding agreement between two or more parties, legally enforceable. Failure to perform the terms in the contract as agreed is a breach of contract.

In the given case, there has been a breach of contract as the contract was terminated earlier than promised resulting in a financial loss for Paige.Paige has the right to go to court and claim for her damages.She can collect expectation damages. Expectation damages are the amount that the employee ought to receive had the contract been performed as promised.

Paige was offered a sum of $100000 per year for a period of two years.The contract got terminated within a period of three months, Paige can claim for $200000 subtracted by the amount received so far.