Top 5 Remedies for Breaching a Business Contract
Contracts ensure that both sides are held to their obligations during a negotiation, and can help prevent disputes from arising.
Unfortunately, not everyone follows through on their commitments, which is known as a breach of contract. In this post, we will discuss the top five remedies for breaching a contract.
If you breach a contract and the other side decides to sue, you could be subject to an injunction. This is a court order that would prevent you from continuing with whatever it is that you’re doing that violates the contract. This could seriously disrupt your business operation and cause significant financial damage.
It’s important to note that not all breaches of contract lead to an injunction being issued. The court will weigh a number of factors before deciding whether or not to issue one. To prevent this from happening, ensure you have contract creation software that will create and store your contract.
Another potential consequence of breaching a contract is rescission. This is when the other side cancels the contract and takes back whatever they gave you in exchange for your performance. For example, if you breach a contract to sell someone a car, they could rescind the deal and take back the money they paid you.
3. Liquidated Damages
When you enter into a contract, you may agree to pay liquidated damages if you breach it. This is a set amount of money that the injured party can collect from you if you break the contract.
For example, let’s say you agree to sell someone a car for $1000, but then breach the contract and don’t deliver the car. The other party could sue you for the $1000, as well as any additional damages they suffered as a result of the breach. Liquidated damages provide a measure of relief for the injured party, and can help prevent them from seeking additional damages in court.
4. Specific Performance
In some cases, the injured party may seek specific performance instead of damages. This is when they ask the court to order you to perform your obligations under the contract. For example, if you breach a contract to sell someone a car, they could ask the court to order you to sell them the car.
This is generally a last resort for the injured party, as it can be costly and time-consuming to get a court order. However, if they feel that they won’t be able to recover any damages in court, they may choose this option.
5. Nominal Damages
In some cases, the injured party may not be able to recover any damages at all. This could be because the breach didn’t cause them any harm, or because they can’t quantify the amount of damage they suffered. In these cases, the injured party may be awarded nominal damages. This is a small amount of money that is designed to show that the other party violated the contract.
There are a number of consequences that can arise from breaching a contract. It’s important to avoid doing anything that could lead to a breach and to take action if you think someone has breached a contract against you.