Tough Negotiation. Timely Resolution.

3 solutions for a major breach of a business contract scenario

On Behalf of | Jul 20, 2023 | Business Law |

Many successful businesses conduct multiple business transactions a day with very few complications. It is common for companies to negotiate very thorough contracts with vendors, service providers, workers and other parties to control costs and daily operations. Ideally, all parties continue performing their contractual obligations until they completely fulfill them or until they negotiate a new arrangement.

Unfortunately, sometimes a business or professional will violate a contractual agreement with another party. A breach of contract can leave a business without the materials or services it requires or scrambling to continue operating. Breach of contract matters often result in litigation, and those who go to court over a contract dispute can potentially ask the courts to support them through via of the three common solutions detailed below.

Contract invalidation

Sometimes, contracts include clauses that clarify the fact that one party’s violation of a single obligation will not void or nullify the agreement. In other words, when one party breaches the contract, the other may still have obligations. Especially when a breach of contract has resulted in damage to the relationship between the two parties, one business may simply want to sever the relationship and end any obligations that they have to the other party.

Compensation for damages

In a scenario where a vendor did not make a delivery and then the company that contracted with them defaulted on a delivery, there could be massive costs involved. Contracts sometimes impose penalties for late delivery, and businesses may incur major expenses because they don’t receive what they should have per the contractual agreement. When there are demonstrable financial losses that resulted from the default or other contract breach of one party, the other party to the contract could potentially present that evidence to the courts and ask for damages.

Enforcement of the contract

The final option involves asking a judge to review and uphold the contract with an order of specific performance. Judges have the authority to compel either party to follow through with their contractual agreement or any other actions that would be necessary to fulfill the contract. A continued refusal to fulfill the order of specific performance might result in contempt of court allegations and other challenges for the party in breach of the contract.

Oftentimes, those pursuing a breach of contract claim in court will ask for specific recourse to resolve the matter. Understanding the most common solutions to breach of contract lawsuits can help people seek the best solution for their unique circumstances.