If you are involved in a Breach of Contract lawsuit, your ultimate goal is normally to "win" the case. Depending on what your role is, a win can be measured in different ways. If you're running a business and filed a lawsuit because another party breached a contract and owes you money, a win to you is likely receiving money for the breach of contract (and possibly attorneys' fees if that is a provision of the contract). However, if you're the party being sued because you allegedly breached the contract, a win from your end could be a dismissal of the case (and hopefully an award of attorneys' fees to you for having to defend against the lawsuit).
As you approach your lawsuit, you want to first think what a win would look like for you. The most basic win for you would, of course, be monetary. You win an award of money, you win your costs and disbursements, you win your attorneys' fees. All of these are determined by the Court and are an amount of money to compensate you for the breach of the contract. But in addition to money, there are other types of remedies that may be available to you. These remedies are often referred to as "Equitable Remedies" and it's the court trying to craft a resolution that is fair to the injured party.
Winning A Breach of Contract Case
The traditional win in a breach of contract case is for you to win money if you are the plaintiff or to not have to pay money if you are the defendant. The amount of money you win can be composed of:
- Money due under the contract
- Attorneys' Fees (if your contract has that provision)
- Costs of the lawsuit
In some cases, you may be awarded all 3. In others, you may only get one or two. But if you win a breach of contract case, it's common that you'll be awarded money as part of that win. However, there are other ways that the court can decide the case and provide you with a win. They are called "equitable remedies."
What are Equitable Remedies?
A court that is using equitable remedies can have a lot of options at its disposal. There are four common types of equitable remedies that relate back to breach of contract lawsuits,
- Injunctions ~ An injunction is a court saying that a party can't do something. There are two primary types of injunctions, permanent and temporary. A temporary injunction normally only lasts while your lawsuit is pending, while a permanent injunction is a final decision that prohibits a party from doing something. For example, you could be permanently stopped from selling a product that infringes on someone else's trademark. The purpose of an injunction is to handle a situation where money damages alone aren't sufficient for one of the parties. While they sound like something that many parties would be interested in, you should know that an injunction isn't normally awarded in a breach of contract case. They are considered extraordinary and if this is the remedy you are going to seek, make sure you are working with an attorney so you can understand the requirements to obtain one.
- Rescission ~ When a court uses rescission, it means that they have terminated all or parts of the contract. Once that happens, the party no longer has an obligation to fulfill the part (or entire) contract term. Whether the entire contract or just a part of the contract is rescinded is up to the court to decide.
- Specific Performance ~ As the name implies, specific performance is where a court directs that one of the parties does something specific. Usually, it will be a specific action that they are supposed to do under the contract. For example, if there is a unique item that is subject to the contract (a piece of artwork, a classic car, a piece of real estate), a court can award specific performance because there are no suitable replacement items.
- Reformation ~ When a court uses reformation, it is attempting to correct the contract to reflect the terms that the parties intended when they entered into a contract. This is often because of a mistake in the contract and is another good reason to make sure you meet with your attorney when you are preparing contracts. The cost to fix a simple mistake in a contract through a lawsuit is far more expensive than simply spending time with an attorney to get it right at the outset.
Each of these remedies has special requirements and needs to be properly submitted to the court. While you may be tempted to save yourself some money and try to represent yourself, these remedies are often best achieved with an attorney. Especially if your contract has a provision for attorneys' fees, you may even be entitled to have the attorney paid for by the other party.
If you're involved in a breach of contract lawsuit or are considering filing one, let's set up a Legal Strategy Session to discuss the next steps for you and help craft a plan for you to get the best results.