A Forward-Thinking Firm

3 types of non-financial solutions to a contract dispute

On Behalf of | Oct 8, 2021 | Contracts |

From exchanging products and services to securing commercial leases and real estate transactions, contracts are essential for businesses small and large. Unfortunately, contract breaches are among the most common issues that companies face.

In many cases, monetary compensation is enough to help repair the damage. However, in certain circumstances, money alone may be inadequate to remedy the losses associated with the breach. In this case, the court may allow parties to pursue a form of equitable resolution.

1. Specific performance

One of the primary reasons for pursuing an equitable rather than monetary remedy is that the subject of the contract dispute is either difficult to acquire elsewhere or is a unique type of property. Common examples include real estate, works of art and custom-made goods. Under specific performance, the court may order the party in breach to fulfill the contract by delivering the promised items.

2. Contract reformation

Oversights, ambiguities or misrepresentations in a contract can easily lead to potential breach issues. If the original language of the contract does not reflect the intention of one or both parties, the court may allow parties to rewrite the document in part or in whole.

3. Contract recission

Whether both parties decide that an existing contract does not serve their needs or one party finds that a contract includes a material misrepresentation, it may be preferable to void the current agreement entirely. Under contract recission, the court may cancel the original contract to help minimize mutual losses and/or release the non-breaching party from contractual obligations.

An equitable remedy may be appropriate for certain specific contract disputes. However, business owners should know that the court may only grant equitable relief if either one or both contractual parties can show that legal damages would be insufficient to redress the contractual wrong.