How much do you know about breach of contract? - II
A few weeks back, our blog began discussing how one feature common among most successful business owners is conscientiousness. Specifically, thriving business owners typically do everything in their power to ensure operations run effectively and efficiently, including doing their best to ensure complete compliance with the terms of contracts and executing contracts only with those parties they consider reliable.
We also discussed how despite this attention to detail, legal disputes concerning breaches of contract can -- and do -- arise. To that end, we began examining how breaches occur, as well as the differences between material and immaterial breaches. We'll continue this discussion in today's post.
What are the options when a breach of contract occurs?
In the event of a breach of contract, the affected party will likely want to recoup any losses or see the contract carried through. There are three different avenues through which they attempt to accomplish this:
- Informal resolution, meaning the two parties attempt to work things out on their own
- Alternative dispute resolution, typically in the form of either mandatory binding arbitration or voluntary mediation
- Litigation, which, depending on the dollar amount of the contract might be resolved in small claims court -- typically between $3,000 to $7,500
What remedies can be sought for a breach of contract?
In general, when a breach of contract occurs, the aggrieved party is entitled to some manner of relief known as a remedy. Under contract law, the three primary remedies for breach of contract are specific performance, restitution and cancellation, and, of course, damages.
What is specific performance?
Specific performance is essentially when one party is ordered by the court to fulfill their obligations under the terms of the contract.
It's frequently pursued as a remedy when damages would otherwise prove inadequate (i.e., money would not restore the non-breaching party to their pre-breach position), and/or the subject matter of the contract is somehow uncommon or unique.
We'll continue this discussion in a future post, examining both restitution and cancellation, and damages.
Consider speaking with a skilled legal professional if you have questions about a contractual matter or other business law concerns.