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Is specific performance the right contract breach solution?

On Behalf of | Nov 8, 2023 | Business Law |

One party’s contract failures can have dire implications for a business. Perhaps a construction company failed to meet certain standards when working on an office remodel. Perhaps a vendor missed a delivery, provided the wrong materials or increased its prices despite very clear terms outlined in a contract.

An organization facing a breach of contract scenario may have operational challenges to overcome and also unexpected expenses to cover. There may be an assortment of different consequences, particularly if the party in breach of the original agreement does not quickly remedy the situation. Sometimes, one business will need to take another to civil court to resolve a breach of contract matter. In some scenarios, seeking specific performance might be an appropriate solution.

What is specific performance?

A civil judge hearing a breach of contract case has the authority to rule in many different ways. Provided that they agree the contract was valid and that the breach occurred, they could potentially release the plaintiff from the contract so they no longer have obligations to the other party. They can award the plaintiff damages when there are clear financial losses stemming from the contract breach.

They also have the authority to order specific performance. In some cases, specific performance is essentially court enforcement of a contract. A judge requires it one party follow through on the obligations outlined in the contract. Other times, specific performance may involve one party going beyond what the contract requires because of the harm the prior breach has caused.

Unlike a new contract between the parties, an order of specific performance has the full weight of the civil courts behind it. If the defendant fails to abide by the judge’s order, they could face consequences for being in contempt of court. Of course, specific performance is not always the best solution.

The plaintiff may worry that the defendant will do subpar work or deliver poor-quality materials out of petty vindictiveness over the lawsuit. However, in scenarios in which a business does not have the capital to pay for damages or in which a plaintiff has not been able to find another service provider or vendor to resolve the issues caused by the breach of contract, specific performance can be the best outcome to a breach of contract lawsuit.

Learning more about the different possible solutions after a material breach of contract may help people demand justice from a party that did not fulfill their agreement. Seeking legal guidance is a good way to get started.