Signing a contract usually means locking in specific expectations. Companies that negotiate contracts with vendors, service providers or landlords should be able to operate confidently knowing that they can rely on the other party to fulfill their contractual obligations.
The vast majority of people and businesses that negotiate contractual arrangements make a good-faith effort to fulfill contractual obligations. However, there are always a few bad apples who may sign contracts that they do not truly intend to uphold. Businesses can experience many different setbacks caused by a contract violation. The choice to initiate a civil lawsuit can potentially help a business resolve a contract dispute.
How can civil litigation benefit those trying to address a breach of contract?
Judges can use their power to resolve an issue
Civil court judges have the authority to resolve contract issues in a variety of ways. Plaintiffs might even request a specific type of solution for a breach of contract situation that has negatively affected business operations.
In some cases, the best solution might be to ask a judge to enforce the original agreement. They can do so by issuing an order of specific performance. Judges can require that a party fulfill prior contractual promises by performing or redoing work. Other times, judges could terminate the contractual arrangements in consideration of the significant breach that occurred.
Sometimes, they could potentially award the plaintiffs damages. When there are direct financial consequences for the breach of the contract, a judge can order the party that violated the agreement to reimburse the other party for those losses. Each of those solutions or a combination of them could help diminish the harm caused by a contract dispute.
Litigation can lead to settlements
Quite a few contract disputes with pending lawsuits never make their way to civil court. Instead, the defendant might reach out directly to the plaintiff to settle the matter after receiving service for the pending lawsuit.
The bad publicity and unpredictable outcome of a breach of contract lawsuit can motivate those who have violated an agreement to finally address the matter. They might fulfill their contractual obligations, make payment arrangements to cover damages or agree to an in-depth negotiation with the plaintiff. A large percentage of business lawsuits settle outside of court. The act of filing can sometimes inspire the party in breach of the contract to finally address the concerns of the plaintiff.
Whether a matter goes to court or settles outside of court, the decision to file a lawsuit is often what leads to the resolution of a breach of contract conflict. Initiating civil litigation is sometimes necessary for those harmed by the contractual defaults of another party.