From acquiring services and goods to leasing, buying or selling real estate, contracts are crucial for large and small companies alike. For this reason, the Uniform Commercial Code ensures that the law enforces business contracts equitably from state to state.
When a party fails to perform contractual obligations, the other party may pursue monetary compensation for business losses by filing a lawsuit. However, often money alone is insufficient to resolve the underlying issue and fully redress the damage done.
1. Reforming a business contract
In many cases, a business dispute occurs due to ambiguity or oversight in the original agreement. The court may allow parties to reform, or redraft, the contract if one or more parties find that the existing terms do not reflect the intentions of the agreement.
2. Rescinding a business contract
Parties to a contract may agree that simply voiding an existing agreement will resolve the dispute while minimizing mutual losses. The court may also approve contract recission if one party has committed a material misrepresentation or mistake or exercised coercion or undue influence.
3. Enforcing a business contract
The subject of a contract may be unique or difficult to procure from another source. Examples may include artwork, antiquities, rare or custom items, real estate or specialized services. In this case, the court may choose to enforce the terms of the original agreement through specific performance.
Known as equitable remedies, these forms of contract dispute resolution may help businesses to redress damages in a way that better suits a company’s long-term interests. However, parties seeking an equitable rather than a legal (compensatory) remedy may need to prove to the court that monetary damages would be inadequate to redress the harm done.