In a way, contracts are the law in the business world. They establish the terms of a business relationship, as well as what each party’s specific responsibilities are. And even a small breach of that contract can have devastating consequences for California businesses in the long run.
When business owners discover a breach of contract, it can be tempting to take immediate action to recover the losses suffered and reduce the risks posed to their business. However, before moving forward in a contract dispute, business owners must know the type of remedy they are looking for in their resolution.
There are a few possible remedies after a breach
In a breach of contract case, there are a few possible outcomes or solutions depending on whether it was a partial or material breach, including:
- Requiring the breaching party to fulfill the obligations outlined by the contract;
- Obtaining monetary compensation for the damages from the breaching party and an injunction;
- Rescinding the contract and releasing both parties from contractual obligations, especially if the breach caused serious damage to the business; or
- Creating a new contract, plus repaying damages, especially if the breach occurred because of a misconception.
If business owners wish to recover the damages the breach of contract caused, they must ensure they take legal action within the time limit established by the state statute of limitations.
Why should business owners consider the outcome beforehand?
Generally, the business contract should outline the specific remedy for a breach of contract within its language. And if business owners ascertain their remedy beforehand, it can also help to inform their strategy for how they will approach such a case.
Therefore, business owners should consider these possible remedies long before they face the risk of a breach of contract case.
Breach of contract cases can be complex. Business owners should consider consulting an experienced business attorney to help them fully understand the details of the case before taking the next steps to recover their losses.