1. Home
  2.  → 
  3. Business Law
  4.  → 2 options when a business’s non-performance hurts your company

2 options when a business’s non-performance hurts your company

On Behalf of | Jun 21, 2022 | Business Law

Contracts are a standard part of business, used for everything from renting commercial spaces and hiring new employees to locking in delivery schedules with suppliers. When you sign a contract, you expect the other party to follow through with their promises to you. 

The contract that you execute helps ensure that you and the other party are in full agreement about the terms of your transaction. Your contract also helps you enforce that agreement if the other party fails to follow through with their obligations to your business. 

Some companies include penalty clauses in their contracts that clearly spell out what will occur if the other party does not fulfill their obligations. Without such terms, others may find themselves wondering what recourse they have during contract litigation breach of contract litigation. What can the courts do to address another party’s non-performance? 

The judge can order specific performance

In theory, a judge can enter a court order compelling the other party to fulfill its obligations to your business. By ordering specific performance, the judge can help uphold your contract. 

If they still fail to follow through with the contract, their actions or omissions may then constitute contempt of court and can lead to secondary consequences. 

The judge can award damages

If you can show that there have been financial losses incurred by your company because of the breach of contract, then you may be able to ask for damages from the other company. A judge may award you the full value of your company’s financial losses incurred because of the contract breach. 

Understanding the remedies you can speak in civil court may help your business better resolve a dispute regarding a recent breach of contract issue.