The harm caused to an individual or legal entity can be material, and it is called damage. It is expressed in the reduction of the property of the injured person or enterprise as a result of impairment of intangible benefits or violation of material rights. The damage is determined based on the consequences of the breach of contractual obligations. The same violation in different cases causes different consequences, and also different violations can cause the same consequence.
It is necessary
Study of the concluded contract and determination of the amount of damage, depending on the situation
Instructions
Step 1
When the injured party has suffered several types of losses, then each type of damage is determined separately and then summed up. However, by concluding an agreement, the parties have the right to establish the procedure for determining the amount of losses to be reimbursed in case of violation of the terms at their discretion. This can be a lump sum or a determination of the amount, depending on the term of the breach of the contract and the amount of default.
Step 2
In case of production downtime and in case of additional wage costs, the costs are calculated as the sum of additional payments and payments for downtime and for work on holidays and weekends, as well as additional payments in the event of an employee transferring to a lower-paid position, the cost of vacation payments.
Step 3
If the volume of production or sales of products decreases, then the unearned profit is calculated as the difference between the cost of one unit of production and the price multiplied by the number of unsold or not produced products due to violation of contractual obligations. The number of products is determined depending on the situation: either by dividing the volume of products by the rate of its consumption per one product, or, in case of downtime, by multiplying the hourly productivity of the idle section by the idle time.
Step 4
The amount of damage consists of lost profits as a result of a decrease in sales or volume of products, regardless of the overall profit plan. That is, if the enterprise was able to produce products on its own, despite violations of the contractual conditions by the supplier, then the supplier is still obliged to reimburse the lost profit.
Step 5
The amount of damage is determined as the sum of all penalties due to the lack of delivery of products to the end point, that is, to the consumer. The increase in the amount of expenses due to a decrease in the number of products produced is calculated as the multiplication of the amount of expense by the number of products that were not released due to violation of the terms of the contract.
