A properly executed business contract generally makes an agreement between two parties enforceable. A contract can commit a client to a specific payment plan or lock a vendor into a certain delivery schedule. Contracts help establish standards for both parties and provide a basis for taking legal action if the arrangement doesn’t work out as the parties initially intend.
Breach of contract scenarios can occur due to the non-delivery of goods, a failure to pay or serious issues with the quality of services or materials provided. A breach of contract scenario can be very frustrating for leadership at a company.
Contract breaches can be expensive and disruptive. Some people dismiss contract breaches as an inevitable issue instead of taking legal action. However, litigation can help mitigate the harm caused by a breach of contract. The following are some of the solutions available if a wronged party pursues a breach of contract lawsuit.
Contract termination
Many contracts include severability clauses that make the contract valid even after a breach of contract occurs. The other party still has an obligation to follow through on contractual promises when the other does not uphold their end of the agreement. A judge can potentially terminate the future obligations between the parties as part of a breach of contract lawsuit. Doing so can help prevent ongoing conflict and additional operational setbacks.
Orders of specific performance
In scenarios where vendors don’t deliver what they should or service providers cut corners, one party may hope to enforce the terms of the initial agreement. A breach of contract lawsuit can lead to an order of specific performance. A judge can require that one party fulfill contractual obligations or take steps to remedy the harm caused by the breach of contract. Orders of specific performance can be worthwhile in scenarios where finding an alternate supplier or service provider could be costly and might result in expensive delays.
A judgment awarding damages
A contract breach can cause a variety of different expenses. A company may suffer operational delays that result in major costs. They might fail to fulfill a contract with an outside party, which could lead to penalties and fees. A judge can potentially award financial compensation to those harmed by a breach of contract to minimize the financial impact of contract violations.
Initiating breach of contract litigation can be a worthwhile endeavor for those harmed by a contract violation. Taking legal action is often a reasonable response to a costly and frustrating breach of contract.