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How specific performance can help after a breach of contract

On Behalf of | Feb 1, 2023 | investment Partnerships

When another company breaches its contract with your business, you may end up scrambling to find an alternate service provider or supplier. Contract breaches can be very expensive. They can delay or complicate operations at one business or force a company into a position where it defaults on an agreement with a third party.

When businesses take action over breach of contract issues, the focus is often on recovering losses in the form of damages. However, a company could also request specific performance as part of a breach of contract lawsuit.

Specific performance involves a judge ordering a party to fulfill its obligations under the contract. Is specific performance the right solution in your case?

The behavior of the other party can determine the best option

If the other party failed to fulfill their contractual obligations for some technical or complicated reason and would likely still prefer to do business with your company, then an order of specific performance might convince them to absorb the necessary losses caused by their initial failure and move on in their relationship with you.

However, litigation and a court order to perform work or deliver certain materials or goods might result in resentful behavior from the other party. You might end up receiving lackluster services or substandard materials from the other party because they begrudged the obligation to fulfill their contract with you.

A careful review of what the other party failed to do and their current attitude toward your organization can help you determine if specific performance would be a reasonable solution or likely to result in future disappointment.

Every contract dispute is a unique challenge

There is no one solution for breach of contract matters that will work for every business dealing with a default or similar breach of contract issue. The nature of your relationship with the other company, the losses you suffered because of the breach of contract and your potential future relationship will all influence the best approach to a breach of contract matter.

Sometimes, negotiating a settlement outside of court is the best option. Other times, going to court and asking a judge for a particular solution may be the better choice. Learning more about how the courts help resolve business disputes can facilitate a faster solution for your contract issue.