In an ideal world, every business and professional would go to great lengths to uphold all contractual obligations. In the real world, countless different issues can prevent the fulfillment of a business contract. A sudden change in leadership at an organization may result in new executives or managers being unaware of prior contractual commitments. Even confusion about expectations can lead to unintentional contract breaches.
Such scenarios could prove very frustrating for the business relying on the contract. If the party that did not uphold the contract does not move to quickly remedy the issue after learning about it, the party affected by the breach may have little choice but to take legal action. The civil courts can provide several crucial forms of recourse in a contract breach scenario.
How can a judge help settle a business contract dispute?
By invalidating the agreement
Contract litigation often begins with an analysis of the contract. Once a judge has determined that the contract is valid, they can acquiesce to requests to invalidate the contract. Contract rescission occurs when a judge agrees to set aside a contract and terminate the obligations that each party has to the other. Rescission eliminates the requirement to continue doing business with the other party. It may also result in a refund of any payments for undelivered goods or deposits for work not performed.
By providing financial relief
Sometimes, contracts include terms that protect the finances of the parties that signed the agreement. There may be penalty clauses a judge can enforce. The party in breach of the contract may have to provide a certain amount of money to the other party for failing to uphold the agreement. Other times, plaintiffs affected by contract breaches could request damages. If they can show a judge that the breach of contract costs their organization money, the judge could award them damages to compensate for the harm done.
By enforcing contract terms
Civil judges also have several options available to them if they want to uphold or enforce the terms of an agreement. If a former employee or service provider violated a non-disclosure agreement, a judge could issue an injunction essentially forbidding them from committing future violations. Judges can also order specific performance. They could require one party to deliver goods as promised initially or correct work already performed to bring it in line with the standards set in the initial agreement.
In many cases, contract litigation benefits plaintiffs by inspiring the party that breached the agreement to address the issue. They may reach out to settle the matter instead of going to trial. Pursuing business litigation can provide both direct and indirect solutions for contractual issues. Business owners and executives may need help documenting contract breaches and determining what forms of relief to request from the courts, and that’s okay.