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3 Ways a Judge Can Resolve a Business Contract Dispute

On Behalf of | Feb 22, 2023 | Business Law

As a small business owner or someone running an organization, you likely take great care when negotiating your contracts. You may even customize every contract you sign to optimize your organization’s protection.

Unfortunately, there is never any guarantee that the other party to the contract will follow through on their obligations to this. Individuals may fail to pay invoices in accordance with contractual terms, and professionals or other businesses may fail to provide services or materials that your company requires. Some breach of contract scenarios are easy to resolve, while others eventually end up in Michigan civil courts.

If you must take the party that breached your contract to court, how can a judge resolve the issue?

1. They can terminate your obligations

Sometimes, a breach of contract makes it clear that you no longer want to do business with the other party. Either because they have failed to make payments in a timely manner or because they have not followed through with promises, you may want to end your business relationship and terminate any obligations that you may have to the other party. A judge can potentially throw out your contract and invalidate it so that you never have to deal with the other party again.

2. They can award you damages

If a judge hears your situation and determines that your organization suffered financial losses or if they agree that the terms of your contract clearly impose specific penalties for contract breaches, they may impose a penalty on the other party. From awarding you damages to upholding terms in your contract that include late fees and other penalty costs, a judge can help compensate your business financially for the failings of another party.

3. They can order specific performance

Sometimes, what your business really needs is for the other party to follow through with their promises. Whether you need them to deliver certain materials or finish the work that they started but never completed, you can ask a judge to order them to fulfill their obligations. An order of specific performance carries the full weight of the civil courts and can often push people into doing what they should when they otherwise would not.

Rather than just accepting that some people won’t uphold their contracts with your company, it may be a better option to take someone to court and show them that you expect them to abide by their agreements. Understanding how judges resolve business-related contract disputes can help you establish expectations for your upcoming day in court.