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How contract disputes are typically resolved

On Behalf of | Nov 6, 2023 | Business Law

When you enter into a valid contract with a Georgia company or any other party, you are bound by the terms of that deal. If the terms of the deal are breached, the breached party may have the right to seek compensation or other forms of relief. The exact remedies are typically determined in the contract itself, however, state law may also determine how a contract dispute is settled.

Financial compensation

A common way to resolve a breach of contract is for the victim of the breach to receive money from the breaching party. The amount that changes hands may be a specific amount written into the contract or an amount equivalent to the economic damage caused by the breach. For instance, if the breach caused $5 million in damages, the party that breached the deal could be ordered to pay $5 million. Legal fees and other costs might also be added to a financial award.

An injunction might be issued

It’s possible that the only way to remedy a breach is to cancel the contract entirely. This could happen if there is no way that a factory could deliver goods that a company ordered or if the quality of the items delivered was substandard. Conversely, a judge might order that the breaching party must deliver goods or perform services as outlined in a contract.

A middle ground might be reached

Many contract disputes might be resolved by providing partial payment for partial goods or services rendered. This is referred to as a quantam meruit and can come into play if a breach occurred after a portion of a deal has been completed.

There are many ways to resolve a breach of contract, such as by holding private talks or working with a mediator. If your claim is successful, you may be entitled to a refund or other damages. The contract itself, messages from a vendor or other evidence may be used to prove that the deal was legally binding and that its terms were not followed.