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How specific performance can resolve contract disputes

On Behalf of | Nov 19, 2023 | BUSINESS & COMMERCIAL LAW - Business Litigation

A contract breach can be both frustrating and expensive for a business. Signing a contract should mean that a business can rely on the other party to the agreement to complete certain actions, deliver necessary goods or avoid behaviors outlined in restrictive covenants. Yet, the failure of another party could potentially result in the business being unable to fulfill its obligations to others or incurring additional expenses.

Sometimes, a contract breach is significant enough to warrant a lawsuit. The party that did not breach the contract can potentially ask the courts to hold the other party accountable for the impact of the failure to uphold the agreement. Requesting specific performance is sometimes an appropriate solution to a situation involving and unfulfilled contract.

What is specific performance?

In a scenario with a valid contract violated by one party that signed the agreement, a judge can potentially enforce the contract through an order of specific performance. Specific performance is an order from a judge requiring certain actions.

Specific performance could force one business to deliver goods or finish work on a project as outlined in the original contract. Unlike a contractual agreement, an order of specific performance has the full authority of the civil courts behind it. If the other business continues to avoid responsibility for contractual obligations, it could face penalties. Failing to fulfill an order of specific performance can constitute contempt of court in some cases.

In scenarios with incomplete projects or goods or materials that are difficult to obtain from outside parties, pursuing specific performance can be a reasonable response to a contract breach. Considering every viable solution for a contract dispute could help an organization minimize the impact of another party’s failure while honoring the unique needs inspired by the circumstances at hand.