How can litigation address a breach of contract?

On Behalf of | Mar 6, 2023 | Business Litigation |

Contracts are the lifeblood of all successful businesses. They may involve deliverables, costs, deadlines and other conditions. Indeed, companies use them to make other contractual commitments. This interconnectedness means that a single breach can lead to further breaches and a loss of revenue. Contracts also stipulate what happens if one party breaches the agreement. If the company is unable or unwilling to rectify the breach, the contract may specify arbitration, which also may not work. Eventually, litigation before a judge may be the only viable solution for equitably resolving the issue.

Winning the case

No responsible attorney should guarantee results, but positive outcomes include the following:

  • Financial damages: Lawsuits often seek compensation for the loss of revenue or incurred expense caused by the breach of contract. There also may be punitive damages awarded by the judge or jury that further punishes the party who breached their agreement.
  • Fulfill obligations: The ruling may require the defendant to honor their agreement or fulfill specific tasks, such as finishing work on a building or providing other deliverables. It may be in addition to financial damages caused by the breach.
  • Return assets: The ruling may involve returning money or goods provided by the plaintiff in good faith. It may even include real property in a real estate transaction.
  • Terminate the contract: Some breaches are not malicious or due to negligence. It may be due to issues beyond the party’s control. The court may rule that the party need not fulfill the contract in question.

Litigation also provides closure

Many say litigation costs more, but it is still the way to remedy an otherwise unresolvable situation, providing closure so a business or individual can move on to other matters. It also sets a precedent that shows that a company is willing to litigate, perhaps dissuading future business partners from breaching their contract if they see that the client is willing to enforce their agreement in court.