Contracts are legally binding agreements between two or more parties with the aim of reaching a specific outcome, such as delivering goods or performing a service. However, if a party fails to meet their side of the agreed terms, the contract may be breached. A contract breach can happen in a few ways, such as failing to meet a delivery deadline, using the wrong material for a building or refusing to do the work outlined in a contract.
When a contract breach occurs, the non-breaching party may seek to resolve the matter. Here are a few common ways a breach of contract can be remedied:
1. Damages
One of the most common solutions to resolving a contract breach involves awarding the non-breaching party damages. These damages may be for the loss of profit, inconvenience or additional costs to resolve a breach.
2. Specific performance
A resolution may be reached that involves the breaching party performing a specific action. This often happens when compensation is not sufficient to resolve a breach alone. The breaching party may be required to fulfill a specific part of the original agreement.
3. Injunction
A court may be involved to settle a breach of contract. The court may require the breaching party to fulfill part of their agreement or prevent the party from taking specific actions that would damage the non-breaching party.
4. Renegotiation
In some cases, a business contract may be renegotiated to help ensure the breaching party fulfills its obligations. This can happen if the terms of an agreement are missing details that would have prevented a party from fulfilling their responsibilities.
Businesses may need to reach out for legal guidance to assess the severity of a contract breach and determine possible resolutions.