If the breach is minor, which of the following best describes potential remedies?

• A. The nonbreaching party may recover damages, but must still perform.
• B. The nonbreaching party may withhold performance until cure.
• C. The contract is terminated automatically.
• D. The nonbreaching party may sue for punitive damages.

Answer: (A)

A minor breach means the contract’s main purpose still holds, so the nonbreaching party isn’t excused from performing. The remedy is to recover the damages caused by the breach while continuing to perform under the contract. In other words, you seek compensatory damages for the loss or extra costs caused by the breach, but the contract remains in force and performance must continue. Termination isn’t automatic for a minor breach, and withholding performance isn’t appropriate because the breach isn’t significant enough to excuse nonperformance. Punitive damages aren’t available for typical contract breaches, which is why that option isn’t correct.