Detroit businesses enter into contracts each and every day. Depending on the goods or services that they provide, their agreements can take on different forms and focus on different elements. At their core, though, contracts include basic terms like an offer, acceptance, and consideration for the contractual relationship.
Another important contractual term that applies to agreements in different environments and industries is remedies. Remedies are the forms of relief that a contractual party may seek if their agreement is breached. A breach happens when one of the parties to a contract fails to perform as they agreed to under the terms of the contract.
Before entering a contractual relationship, a party should understand what remedies they will have at their disposal to fix breaches. Agreements often limit what remedies parties can seek to enforce and can alter how parties interact following breaches. This post offers no legal advice and all readers with remedies’ questions should contact their trusted business law attorneys.
Types of contractual remedies
As stated, different contracts will have different possible remedies. Those remedies often fall into general categories. Those categories can include but are not limited to:
- Damages: These are the financial losses that a business incurs when another party breaches their agreement. Damages can compensate victims for their losses and can punish breaching parties for their wrongful acts.
- Specific performance: Specific performance requires a breaching party to fulfill their contractual duties. This is often an option when a breaching party offers a unique product or service that cannot be secured from a different entity.
- Cancellation: Cancellation allows a harmed contractual party to cancel their agreement with a breaching party without incurring liability.
Before a business enters into a contract, it should review its agreement to see what remedies the contract provides in the event their contract is breached.
Addressing a breach of contract in business
Breached contracts happen unfortunately too often in business, forcing entities to compel performance, enforce their agreements, and sue for the recovery of their losses. Few businesses have the resources to manage these complex and important matters on their own. When breached contracts affect Michigan businesses, they can benefit from the support and counsel of dedicated local business law attorneys.