How litigation can help resolve a breach of contract

On Behalf of | Oct 5, 2024 | Business Litigation/Disputes

When an executive or business owner signs a contract, they usually expect to receive the goods, services or payments as outlined in the contract. Unfortunately, not everyone follows through on their contractual obligations as they should.

Sometimes businesses do not receive deliveries from vendors or have to deal with a half-finished project left uncompleted by an outside company. Other times, a company may provide goods or services, only for the recipient to default on their payment obligations. Contract breaches can lead to disruptions in business operations or an inability to cover operating expenses.

The party in breach of the contract may refuse to remedy the situation. In those scenarios, it is sometimes necessary to take the matter to civil courts. Judges can potentially help companies properly handle a breach of contract situation.

Judges have many ways to correct a breach

Depending on the nature of the agreement and the breach that occurred, there are numerous potential solutions in a breach of contract litigation scenario. Judges can terminate the contract so that neither party has future obligations to the other.

They can enforce the contract, possibly by ordering specific performance. A judge can require that one party fulfill their contractual promises or re-do work that did not meet contractual standards. Judges can also enforce penalty clauses by requiring that the party in breach pay certain fees as outlined in the initial agreement.

Judges also have the authority to award damages. The party that experienced the breach of contract can quantify the impact the matter had on the business and request financial compensation for those losses.

Any of those arrangements can diminish the negative impact a contract issue has on plaintiff and impose penalties for the defendant who did not uphold their contractual obligations. In situations where one party has blatantly violated a contract and has not responded to attempts to resolve the matter, filing a lawsuit can be the most effective solution available.

Pursuing breach of contract litigation can potentially lead to specific performance or financial compensation for a company negatively impacted by contractual issues. Judges can help businesses to potentially minimize the harm a contract breach inspires.