Contract breaches are a fact of life for most businesses. While finding out that the other party has not lived up to its end of the bargain can be frustrating, there are steps you can take to recoup your losses or even save the deal.
Money Damages
In most breach of contract suits, the breaching party makes some type of financial payment to the non-breaching party. Sometimes, the agreement will contain a liquidated damages clause that specifies the penalty for a breach. In other cases, the breaching party must pay compensatory damages, which are designed to put you in the same position you would have enjoyed had the contract been properly performed. Punitive damages, which are designed to punish the other party's bad behavior, may be imposed if the breach was particularly egregious.
Equitable Remedies
While the payment of financial damages is the most common resolution to a breach of contract lawsuit, it is not your only option. When money is not enough to rectify the situation, you may also pursue one of the following equitable remedies:
Specific performance: With this remedy, the court orders the breaching party to perform its obligations under the contract. Specific performance generally applies when the subject matter of the contract is unique or monetary damages are otherwise insufficient to make the innocent party whole.
Cancellation: The court may also allow the innocent party to walk away from the deal altogether, particularly if the contract is in its early stages. By canceling the agreement, both parties are relieved of any obligation to perform.
Reformation: If the court or the parties believe the deal can be salvaged, they may alter the terms of the contract to allow the deal to proceed, even after the breach.
How We Can Help
An experienced business lawyer can help you determine the most effective remedy after a breach of contract. Contact us today to schedule a free telephone case evaluation.
