Everett Gaskins Hancock Tuttle Hash LLP

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Weighing specific performance as a conflict dispute solution

On Behalf of | Apr 17, 2023 | Business Law/Commercial Litigation

Business contract disputes can be both frustrating and quite expensive. Organizations can lose money immediately when a contract breach occurs, especially if it relied on an outside provider for goods or services that it did not receive in a timely manner.

Occasionally, breach of contract issues occur due to organizational challenges or oversights, and the party that fails will quickly act to correct their mistakes. Other times, both parties to the dispute may feel as though the other is in the wrong. They may find themselves at a crossroads where neither party is willing to compromise with the other.

Going to court is sometimes necessary to resolve breach of contract matters. Of the various solutions available, specific performance is one of the more popular suggestions. An order of specific performance occurs when a judge requires one party to fulfill their previously made commitment to the other, possibly by finishing a project or delivering goods. How does an organization determine if specific performance would be the right solution in their case?

Look at the scope of the breach

If one party has failed to provide materials for several months or to finish a project and has since blamed organizational struggles for that shortcoming, the party affected by the breach will have to explore whether or not the party in violation of the agreement is truly capable of fulfilling the terms they set.

In some cases, the breach may be so substantial that it is no longer realistic to expect the other party to fulfill their obligations, especially if their organization is on the brink of insolvency. However, if it would only be one more delivery made by a successful company, then it may not be a real challenge for the company.

Consider if there is still trust in the relationship

Another important factor in whether or not specific performance is a viable solution for a contract dispute scenario is whether or not the plaintiff trusts that the other party will do their best to comply with the order of specific performance after court. If there’s reason to believe that they might deliver substandard materials or do a very poor job in terms of workmanship on a service-related matter, then it may be better to request damages or the termination of the contract rather than specific performance.

When the trust in the relationship is gone or when it doesn’t seem feasible to expect the other company to make good on the contract anymore, the business filing the breach of contract lawsuit may need to alter the request it makes to the courts to reflect what it believes would be the best outcome.

Evaluating every viable solution in a breach of contract scenario with the assistance of an experienced legal professional can benefit organizations that are seeking to mitigate the harm caused by the failings of another party to an agreement.