There are many types of contracts for both goods and services. Depending on the contract, different remedies are available when the other party breaches his obligations.
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While contracts vary in many ways, to be a valid contract, all contracts must have an offer, acceptance and consideration.
One clause that may vary from contract to contract is a remedy for breaching the contract.
A breach occurs when a party fails to uphold their obligations of the contract.
There are many types of remedies, but the most common categories of remedies are:
- Specific performance
- Damages
- Cancellation
Specific performance forces the party in breach to uphold their end of the deal. This is usually a remedy when the other party cannot get the good or service anywhere else.
Damages are financial losses that result from the breach. Damages can also act as a punishment for breaching parties that perform wrongful acts.
Finally, cancellation allows the non-breaching party to get out of the agreement without any liability.
It is important that you carefully review your contracts with an attorney prior to executing. You should know exactly what remedies are available to you, and what remedies are not available.
Sometimes, contracts will have alternative dispute resolution provisions that dictate an out of court process for issues. This could change the potential damages and could impact the cost to you for engaging in the dispute.
There are many things to consider when reviewing a contract, but remedies should be at the top of your list.
If you have any questions about your business contracts, call Rickard & Associates today!
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