Both parties who agree to the terms of a contract should be able to trust that the other will follow through with their promises. Unfortunately, breaches of contracts occur with some regularity in the business world.
Suppliers fail to deliver what they committed to provide or service providers don’t meet the standards agreed upon in the contract. Some breach of contract issues are easy to resolve because the party at fault admits their responsibility and takes prompt action to rectify the situation. Other times, breach of contract matters result in litigation. Taking the matter to court may be the only way to resolve the issue in a manner that does not disadvantage the party that upheld the agreement.
What are the most common possible solutions that may be facilitated by the civil courts in such scenarios?
An order of specific performance
In scenarios where one party has simply failed to fulfill contractual obligations, the courts can take action to essentially enforce the contract or remedy the impact of the breach. An order of specific performance creates an obligation to perform certain tasks. Unlike the initial contract, an order of specific performance carries the full weight of the courts. The failure to fulfill an order of specific performance might lead to allegations of contempt of court.
An injunction
Contract violations don’t always involve non-performance. Sometimes they might involve the disclosure of confidential information, attempts to do business with a company’s clients or trying to hire some of that company’s employees. Civil court injunctions can either require specific conduct or forbid parties from engaging in certain actions that could harm the other business.
An award of damages
In scenarios where the contractual breach has had a provable economic impact on one business, the affected party can ask for damages. The courts can effectively award one party compensation for delays in company operations and other expenses directly related to the breach of contract that occurred. The courts can also potentially enforce any penalty clauses included in the original agreement.
Pursuing contract litigation can help diminish the negative impact that one party’s breach of contract has on another company. In some cases, the other party may attempt to settle before going to trial. Other times, the courts can help remedy the breach in a beneficial way. Organizations that consistently enforce their contracts can potentially deter others from violating written agreements.
