From exchanging products and services to leasing and transferring real estate, legal contracts are an essential part of American commerce. Adopted by every state in the U.S., the Uniform Commercial Code ensures that businesses can rely on the law to enforce those contracts if necessary.
In the event of a contract breach, the non-breaching party may be able to recover monetary damages in court. However, financial compensation is not always enough to restore a business’s position. Equitable remedies offer a potential non-monetary alternative when parties need to resolve a contract issue.
1. Specific performance enforcement
When the subject of a contract is unique or difficult to acquire from another source, such as a piece of property or a rare good, it may be preferable to request that the court enforce the terms of the original agreement. Known as specific performance, under this remedy the court orders the breaching party to perform the specific actions stated in the contract.
2. Contract reformation
In some cases, a contract may contain a mistake, ambiguity or misrepresentation that does not reflect the original intentions of each party. When this happens, a judge may order the parties to rewrite the contract in whole or in part so that it accurately conveys the true intention of the agreement.
3. Contract Rescission
Rescission allows one or both parties to dissolve the original contract entirely. This may be preferable when parties agree that doing so will help to minimize the cost of mutual damages. Rescission may also be appropriate if one party has committed a misrepresentation or mistake, breached fiduciary duty or else exercised undue influence or coercion.