It is common knowledge that a well-drafted contract will help to minimize disputes in business transactions, but not everyone fully understands what constitutes a well-drafted contract. Is a contract that clearly regulates the obligations of the parties sufficient? No, a well-drafted contract will not only let the parties know what to do; but should also force them to do what they promised, regardless of whether they want to do so or not. To achieve that, all contracts should have a well-designed system of remedies that the parties can invoke to prevent breach of contract or, in some cases, collect the reasonable compensation for the damage caused by such breach. Below is our analysis of some common remedies and how to effectively use them in contract drafting. Monetary Remedies Compensatory damages Compensatory damages are money to compensate for all losses caused by the breach of contract. This remedy can be regulated for almost all types of contracts and all types of breaches. Nevertheless, the reliability of compensatory damages is low because it requires heavy burden of proof in practice. At the court, the plaintiff will be required to prove the accurate number of losses by documents such as contracts, invoices, etc. and estimation of losses is usually not allowed, which can be quite impractical for some kinds of losses. For instance, in a case where Company A fails to deliver the goods to Company B, Company B can claim the costs for purchasing the goods from another third party using the corresponding contracts and invoices. However, for the losses of profits and business disruption caused by Company A’s breach...