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3 ways the courts may resolve a breach of contract issue

On Behalf of | Aug 27, 2023 | Uncategorized

Those who own, manage and/or operate a business have a lot of day-to-day responsibilities. They generally need to ensure the smooth continuation of basic business functions, which typically requires that they negotiate effective contracts. Employment contracts help ensure that there will be appropriate professionals on hand to achieve business goals, while vendor contracts help ensure there are appropriate materials or supplies for the company’s day-to-day operations. Leases, service agreements and contracts with clients can all also play very important roles in a company’s success.

After investing time and energy into the creation of business contracts, professionals expect other parties to adhere to those agreements. Sadly, some people will completely fail to follow through on contractual obligations. Going to court may be the best solution if another party breaches a contract. These are the primary ways that a judge to may resolve a breach of contract situation.

Ending the contract

Contracts often impose numerous different requirements on both parties. One party to the contract delivers goods, and the other makes a payment. A breach of contract can do serious damage to the relationship between the parties, and the business may want to end those obligations so that the other party cannot make any financial claim against the organization in the future.

Awarding damages

A material breach of contract is often more than just frustrating. It can be expensive and lead to sizable losses, particularly if it delays the fulfillment of an agreement with another party or forces a business to idle its production facilities temporarily. The more provable damages a business incurred because of a contract breach, the better the chances of a judge awarding financial compensation for those losses.

Ordering specific performance

Judges have the theoretical authority to enforce contracts by ordering specific performance. Instead of simply facing financial consequences for the breach, the other party could end up facing much more serious penalties if they persist in refusing to provide services or deliver goods. Those that ignore in order of specific performance could end up prosecuted for contempt of court.

Oftentimes, those pursuing a breach of contract lawsuit will find that the other party may be more willing to settle once there is an obvious risk of the courts intervening. Understanding the different solutions available can potentially help those that run businesses see the value in filing a breach of contract lawsuit, or at least, in having their attorney let the other party know that a lawsuit is an option if a fair resolution cannot be achieved in any other way.