What are non-financial ways of handling contract disputes?

On Behalf of | Sep 8, 2021 | Contract Disputes |

When you deal with a failure of a contracted party to deliver on their end of the contract, it can result in a loss of standing with your clients or customers, and a loss of revenue.

You can often choose to pursue financial compensation as an option in these cases. However, financial solutions do not always actually remedy or even address the issues behind a fault in the contract. You can instead look into equitable remedies, also known as injunctive relief.

Written agreements and the UCC

The Uniform Law Commission looks into the Uniform Commercial Code (UCC) which dictates all forms of commercial activity in the United States. When someone fails to uphold their end of a contract, it is a breach against both the written agreement and the UCC. Thus, you as the breached party can seek one of three non-financial options for compensation.

Three options for non-financial compensation

One: reformation. If you, the other party, or all parties involved believe that the original intentions of your agreement ended up lacking proper representation in your current contract, you can choose to rewrite the faulty portion. This requires mutual agreement, as well as a genuine ambiguity or mistake overlooked by all parties initially. You can also rely on this option if one party intentionally or unintentionally misled you.

Two: specific performance enforcement. This happens if the contract subject is hard for you to acquire in another place, or if it is unique. The court will order the breaching party to carry out their end of the contract, as you would struggle to find someone else to take their place.

Third: rescission. This renders your contract void, unmaking the agreement between all parties. You can all agree mutually to discharge remaining obligations without further conflict, or you as the non-breaching party can choose rescission on your own if dealing with matters like fraud, undue influence or material misrepresentation.