The parties to a business contract must carry out the obligations set forth in that contract.
The failure to fulfill obligations under the agreement results in a breach of contract. There are several remedies to consider at this point. One of them is known as “specific performance.”
About breach of contract
In legal terms, the failure of one party to fulfill its contractual obligations constitutes a breach of contract. Causes include financial problems, disputes, delays and other unexpected events. To resolve the problem, a first step is often some form of alternative dispute resolution. Successful resolution outside of court is the less expensive and time-consuming choice. However, if ADR fails, litigation is always a possibility.
Payment of damages
The most common remedy in resolving a breach of contract is the payment of damages. For example, the goal of paying compensatory damages is to restore the non-breaching party to the condition that existed prior to the breach. Nominal damages refer to damages awarded when there is no proof of monetary loss to the non-breaching party.
If payment of damages is not sufficient, the non-breaching party may seek specific performance as a remedy. This means that the court can order the breaching party to take up performance of duty under the contract as originally agreed. The court may use this remedy if the subject of the contract is something rare or unique. Real estate is an example of unique subject matter. Money damages may not suffice if the contract involves the sale of a unique property and specific performance may play a role in the disposition of the property. Specific performance is but one of several remedies used in resolving breach of contract issues.