When it comes to disputes arising from contractual relationships, parties often turn to the courts to resolve their differences. Contract litigation can be a lengthy and costly process, but if successful, it can result in damages being awarded to the prevailing party. In the United States, federal district courts have jurisdiction over cases that involve disputes arising from contracts that are governed by federal law or interstate commerce. In this blog article, we will take a closer look at the damages that can be awarded in contract litigation cases in federal US district courts.

Types of Damages Awarded in Contract Litigation

The types of damages that can be awarded in contract litigation cases are generally classified as either direct or consequential damages. Direct damages are those that flow directly from the breach of the contract and are usually intended to compensate the non-breaching party for the loss suffered as a result of the breach. Consequential damages, on the other hand, are those that result from the breach but are not the direct or immediate result of the breach itself. Instead, they are the result of the non-breaching party's attempt to mitigate or remedy the harm caused by the breach.

Direct Damages

Direct damages are typically awarded to compensate the non-breaching party for the harm caused by the breach of the contract. The types of direct damages that can be awarded in contract litigation cases include:

Expectation damages: These are damages that are intended to put the non-breaching party in the position they would have been in had the contract been performed as agreed. Expectation damages are usually calculated based on the amount of money the non-breaching party would have received if the contract had been performed as agreed.

Consequential damages: These are damages that are a direct result of the breach and are intended to compensate the non-breaching party for any losses that flow from the breach. For example, if a supplier breaches a contract to deliver goods to a buyer, the buyer may be entitled to consequential damages for any losses they incur as a result of the supplier's failure to deliver the goods.

Liquidated damages: These are damages that are agreed upon by the parties at the time the contract is signed. Liquidated damages are usually intended to compensate the non-breaching party for specific types of harm that may result from a breach of the contract.

Consequential Damages

Consequential damages are damages that flow from the breach of the contract but are not the direct result of the breach itself. These damages are often more difficult to prove than direct damages because they require the non-breaching party to show that the damages were caused by the breach and were foreseeable at the time the contract was signed.

Consequential damages can include lost profits, lost opportunities, and other types of indirect losses that are a result of the breach of the contract. In order to recover consequential damages, the non-breaching party must show that the damages were a direct result of the breach and that they were foreseeable at the time the contract was signed.

Punitive Damages

Punitive damages are damages that are intended to punish the breaching party for their actions. Punitive damages are not typically awarded in contract litigation cases unless the breach of the contract was particularly egregious, such as in cases involving fraud, bad faith, or intentional misconduct.

Attorney's Fees and Costs

In addition to damages, the prevailing party in a contract litigation case may also be entitled to recover their attorney's fees and costs. Attorney's fees and costs can be significant, particularly in cases that are litigated over an extended period of time. In some cases, attorney's fees and costs can even exceed the amount of damages awarded.

Federal Damage Statistics for Contract Litigation

• data based on 23,718 federal district court cases dating from 2003 to 2023

Distribution (Monetary Damages)

Distribution | Percentage of total dockets $1-$5k | 3% $5k-$50k | 11% $50k-$100k | 13% $100k-$500k | 46% $500k-$1m | 11% $1m-$50m | 15% $50m+ | 1%

Distribution (Attorney Fees and Costs)

Distribution | Percentage of total dockets $1-$5k | 59% $5k-$50k | 32% $50k-$100k | 3% $100k-$500k | 4% $500k-$1m | 1% $1m-$50m | 1% $50m+ | 0%

Damage Types (Monetary Damages)

Damages Type | Number of dockets | Median awarded amount Compensatory Damages | 14,026 | $212,181 Settlement | 3,006 | $145,737 Interest | 965 | $22,440 Liquidated Damages | 86 | $190,964 Punitive Damages | 61 | $276,000 Statutory Damages | 33 | $10,000

Damage Types (Attorney Fees and Costs)

Damages Type | Number of dockets | Median awarded amount Litigation Costs & Expenses | 5,753 | $1,149 Attorney Fees | 3,631 | $8,288

Court (Monetary Damages)

Court | Number of dockets | Median awarded amount D.N.J. | 1,708 | $214,126 S.D.N.Y. | 1,348 | $258,769 E.D.Pa. | 1,248 | $171,043 N.D.Ill. | 1,124 | $218,278 D.Md. | 630 | $161,797 C.D.Cal. | 523 | $189,871 E.D.Va. | 470 | $219,411 S.D.Tex. | 391 | $203,100 N.D.Tex. | 369 | $187,000 N.D.Ga. | 345 | $283,188 E.D.Mich. | 337 | $176,997 N.D.Ohio | 331 | $200,000 E.D.N.Y. | 326 | $194,577 M.D.Fla. | 312 | $200,000 N.D.Ala. | 309 | $257,746 W.D.Pa. | 290 | $210,031 S.D.Fla. | 266 | $261,702 D.Ariz. | 249 | $217,857 D.Puerto Rico | 224 | $115,700 D.Utah | 203 | $234,334

Court (Attorney Fees and Costs)

Court | Number of dockets | Median awarded amount C.D.Cal. | 759 | $4,231 N.D.Tex. | 367 | $4,338 N.D.Ga. | 303 | $3,183 S.D.Tex. | 284 | $2,670 N.D.Ill. | 283 | $5,000 M.D.Fla. | 276 | $4,587 D.Md. | 263 | $1,900 S.D.N.Y. | 259 | $1,910 D.Ariz. | 246 | $3,464 N.D.Cal. | 237 | $3,317 S.D.Fla. | 230 | $1,899 D.Colo. | 228 | $3,094 D.Nev. | 205 | $3,544 E.D.Va. | 191 | $3,326 D.Or. | 171 | $2,777 E.D.Cal. | 162 | $3,416 D.N.J. | 154 | $4,052 E.D.La. | 149 | $2,065 W.D.Wash. | 140 | $2,707 E.D.Mich. | 130 | $1,541

Case Type (Monetary Damages)

Case type | Number of dockets | Median awarded amount Contracts | 17,174 | $200,189 Other | 37 | $40,000

Case Type (Attorney Fees and Costs)

Case type | Number of dockets | Median awarded amount Contracts | 8,625 | $3,395 Other | 34 | $1,606

Law Firm (Monetary Damages)

Law Firm | Number of dockets | Median awarded amount LeClairRyan | 239 | $252,534 Connell Foley LLP | 181 | $215,350 Day Pitney LLP | 177 | $258,783 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC | 152 | $228,772 Faegre Drinker Biddle & Reath LLP | 130 | $266,152 Troutman Pepper Hamilton Sanders LLP | 129 | $400,000 Fox Rothschild LLP | 128 | $250,000 Bradley Arant Boult Cummings LLP | 126 | $306,176 Greenberg Traurig, LLP | 120 | $419,020 Reed Smith LLP | 117 | $431,674 People's United Financial, Inc. | 112 | $222,642 Burr & Forman LLP | 110 | $383,156 Locke Lord LLP | 110 | $571,844 McElroy, Deutsch, Mulvaney & Carpenter, LLP | 110 | $291,493 Wilson Elser Moskowitz Edelman & Dicker LLP | 103 | $234,232 McGuireWoods LLP | 101 | $236,466 Dentons US LLP | 99 | $394,517 Hinshaw & Culbertson LLP | 99 | $195,166 Holland & Knight LLP | 94 | $316,000 Husch Blackwell LLP | 92 | $334,787

Law Firm (Attorney Fees and Costs)

Law Firm | Number of dockets | Median awarded amount Hinshaw & Culbertson LLP | 119 | $4,319 Lewis Brisbois Bisgaard & Smith LLP | 111 | $2,264 Dentons US LLP | 105 | $2,962 Gordon Rees Scully Mansukhani, LLP | 90 | $4,286 Foley & Lardner LLP | 84 | $6,089 Locke Lord LLP | 83 | $5,632 Fox Rothschild LLP | 82 | $4,235 Greenberg Traurig, LLP | 82 | $4,150 Wilson Elser Moskowitz Edelman & Dicker LLP | 80 | $3,613 Troutman Pepper Hamilton Sanders LLP | 79 | $3,849 Snell & Wilmer L.L.P. | 77 | $8,770 Ogletree, Deakins, Nash, Smoak & Stewart, P.C. | 71 | $2,117 Holland & Knight LLP | 69 | $5,404 Hunton Andrews Kurth LLP | 68 | $3,652 Faegre Drinker Biddle & Reath LLP | 67 | $4,291 K&L Gates LLP | 66 | $5,382 Lewis Roca Rothgerber Christie LLP | 66 | $2,905 Holland & Hart LLP | 65 | $6,123 DLA Piper LLP (US) | 64 | $3,260 Morgan, Lewis & Bockius LLP | 61 | $8,444

Year (Monetary Damages)

Year | Number of dockets | Median awarded amount 2022 | 82 | $223,402 2021 | 245 | $243,126 2020 | 386 | $253,145 2019 | 450 | $204,660 2018 | 464 | $197,464 2017 | 467 | $201,152 2016 | 504 | $209,964 2015 | 601 | $198,504 2014 | 669 | $206,065 2013 | 778 | $272,520 2012 | 746 | $221,726 2011 | 973 | $236,179 2010 | 1,052 | $241,604 2009 | 1,148 | $236,313 2008 | 965 | $211,619 2007 | 840 | $223,158 2006 | 738 | $216,433 2005 | 836 | $200,722 2004 | 852 | $167,981 2003 | 554 | $175,835

Year (Attorney Fees and Costs)

Year | Number of dockets | Median awarded amount 2022 | 82 | $223,402 2021 | 245 | $243,126 2020 | 386 | $253,145 2019 | 450 | $204,660 2018 | 464 | $197,464 2017 | 467 | $201,152 2016 | 504 | $209,964 2015 | 601 | $198,504 2014 | 669 | $206,065 2013 | 778 | $272,520 2012 | 746 | $221,726 2011 | 973 | $236,179 2010 | 1,052 | $241,604 2009 | 1,148 | $236,313 2008 | 965 | $211,619 2007 | 840 | $223,158 2006 | 738 | $216,433 2005 | 836 | $200,722 2004 | 852 | $167,981 2003 | 554 | $175,835

Conclusion

Contract litigation can be a complex and costly process, but if successful, it can result in damages being awarded to the prevailing party. Direct damages, consequential damages, and liquidated damages are the types of damages that can be awarded in contract litigation cases, with consequential damages being more difficult to prove. Punitive damages are not typically awarded unless the breach of the contract was particularly egregious. In addition to damages, the prevailing party in a contract litigation case may also be entitled to recover their attorney's fees and costs.

It is important to note that the damages that can be awarded in contract litigation cases are subject to certain limitations. For example, in cases involving breaches of contracts for the sale of goods, the damages that can be awarded are limited to the difference between the contract price and the market price of the goods at the time of the breach. Additionally, the non-breaching party has a duty to mitigate their damages, which means that they must take reasonable steps to minimize the harm caused by the breach.

In order to recover damages in a contract litigation case, the non-breaching party must prove that the other party breached the contract and that they suffered harm as a result of the breach. This can be a challenging task, particularly in cases where the breach is not readily apparent or where the harm suffered by the non-breaching party is difficult to quantify.

In many cases, parties to a contract will include a provision in the contract that requires disputes to be resolved through arbitration rather than litigation. Arbitration is a private process that is often faster and less expensive than litigation. However, the damages that can be awarded in arbitration are generally more limited than the damages that can be awarded in litigation.

In conclusion, contract litigation can result in damages being awarded to the prevailing party, including direct damages, consequential damages, and liquidated damages. Punitive damages are not typically awarded unless the breach of the contract was particularly egregious. The prevailing party may also be entitled to recover their attorney's fees and costs. However, the damages that can be awarded in contract litigation cases are subject to certain limitations, and the non-breaching party must prove that they suffered harm as a result of the breach. Parties to a contract may also consider including an arbitration provision in the contract as an alternative to litigation.