From securing products and services to purchasing, selling or leasing real estate, legal contracts are the lifeblood of American commerce. In the U.S., the Uniform Commercial Code ensures equitable enforcement of business contracts from state to state.
When a contract breach occurs, the non-breaching party may pursue monetary compensation. However, money alone may not be enough to resolve the dispute and redress the damage done by the breach.
Also known as “injunctive relief”, equitable remedies provide non-monetary solutions to breach of contract that may better serve a business’s long-term interests.
1. Contract reformation
Business disputes often occur due to oversights or ambiguities in the original contract. If one or both parties find that the written agreement does not reflect contractual needs, the court may allow the parties to rewrite, or reform, the contract in part or in whole. An agreement may also require reformation if one party has intentionally or unintentionally misled the other.
2. Contract recission
Contract recission voids the original written agreement entirely. Recission may be appropriate when both parties agree that doing so would minimize mutual losses. Voiding a contract may also be appropriate when one party has committed a material mistake or misrepresentation, exercised undue influence or coercion, or otherwise breached fiduciary duty.
3. Contract enforcement
In some cases, the non-breaching party simply wants the other party to fulfill the terms of the original agreement. A specific performance enforcement order may be necessary when the subject of the contract is unique or difficult-to-acquire elsewhere, as in the case of real estate, rare goods, antiquities, artwork or specialized services.
From loss of customer or client confidence to disruption of day-to-day operations, a contract breach often involves much more than simple monetary loss. Equitable remedies may offer business owners a smarter path toward righting a contractual wrong.