Contracts are legally binding agreements that, in the business world, are the driving force of just about everything. Contracts can address terms of employment, supply chains and terms of sale. When parties competently negotiate these contracts and adhere to their terms, the business world can run quite smoothly. However, far too often one party fails to live up to its obligations under the contract. This is known as a breach of contract.
When a contract is breached, there are three types of remedies that can be sought. The first is damages, which essentially means recovering money from the breaching party. There are many different types of damages that can be recovered. A contract can specify an amount of liquidated damages that will be paid upon breach, but oftentimes the damages sought seek to put a wronged party back in the position it was in prior to the breach.
Sometimes, the damages seek to put the wronged party back in the position it was in prior to the contract's execution. The type of damages depends on the circumstances at hand. But, damages are not the only remedy available to those who are victimized in a breach of contract case. Specific performance is also available. This remedy allows a wronged party to obtain a court order that orders the breaching party to perform its obligations under the contract. This remedy is usually reserved for cases that involve unique or some type of specialized work, such as artwork.
The third type of remedy available in a breach of contract case is cancellation and restitution. Here, a party merely seeks to have the contract canceled and recover compensation that puts it back in the same financial position it was in before the creation of the contract. The stakes can be high in breach of contract cases, which is why it is imperative that those dealing with a breach of contract dispute consider acquiring competent legal assistance. Doing so can help a party protect itself as fully as possible regardless of which side of the issue it finds itself on.