What Non Monetary Compensation Exists for Breach-of-Contract Remedies?
Though you may be familiar with commercial litigation resulting in monetary compensation following a breach-of-contract, did you know that there are also equitable remedies available? Equitable remedies are solutions that are specifically prescribed in order to right the wrong that has been done.
There are many ways that a business contract can be breached. The most obvious is when a promised payment is not given: the solution to that is for a court to compel that payment to be made. But in many cases, a breach-of-contract may be an aspect or aspects of the contract not being fulfilled. In this case, the court often seeks an equitable remedy that resolves the issue, particularly in instances where payment alone doesn’t go far enough to make the injured party whole.
When a court reviews the specifics of a breach of contract, they first determine whether payment of damages will suffice. If it does not, they then turn to alternative, nonmonetary compensations, including:
- Cancellation or Rescinding of the Contract – When the situation between the parties to a contract cannot reach an agreement, or the terms of the contract are so unclear that there is extensive disagreement about what the contract entails, the contract may be entirely canceled or rescinded.
- Reformation of the Contract – When the situation between the parties to a contract is untenable because each in interpreting its terms differently, the contract can be rewritten to the satisfaction of both so that the agreement can move forward.
- Specific Performance – When specific performance is ordered it means that the court instructs the party that is not in compliance with the contract’s terms is ordered to perform as per the terms that had been agreed to. This can mean performance of service or delivery of goods, and it may mean payment.
- Restitutional Damages – When one party to a contract has already delivered their side of the agreement and the other side has not, it can lead to what is known as unjust enrichment. In this case, a judge may order the breaching party to pay what they owe (or deliver services) in order to ensure that everything is fair.
Though performance may make the most sense in a breach of contract situation, it is usually not the first thing that a party to a contract may seek in commercial litigation: in most cases, those who pursue legal action want little to do with the breaching party and are simply looking for monetary compensation. However, equitable remedies may be the only option that is available. For assistance in making sure that you are treated fairly in a business contract, contact our commercial litigation law firm today.