Potential Remedies for Contract Litigation

 Posted on May 14, 2024 in Business Formation

Contract disputes can turn into complex litigation. The law offers various potential remedies for those engaged in contract litigation. A Texas lawyer can help you explore the remedies available. Each case is unique, so it is important to create a unique strategy.

Compensatory Damages

The most common remedy in contract litigation is compensatory damages. These damages are intended to compensate the non-breaching party for any losses suffered due to the breach of contract. In Texas, compensatory damages can include:

• Expectation damages: These damages aim to put the non-breaching party in the position he or she would have been in had the contract been fully performed.
• Reliance damages: These damages provide compensation to the non-breaching party for expenses incurred in reliance on the contract.
• Restitution: This remedy requires the breaching party to return any benefits received from the non-breaching party.

Texas courts will assess the specific circumstances of each case to determine the appropriate amount of compensatory damages.

Specific Performance

In some cases, monetary damages may not be sufficient to remedy a breach of contract. Specific performance is an equitable remedy that requires the breaching party to fulfill the obligations under the contract. This remedy is typically granted when the subject matter of the contract is unique or rare, such as real estate or custom-made goods.

To be granted specific performance in Texas, the non-breaching party must demonstrate that monetary damages alone would be inadequate. The court must find that the contract terms are sufficiently clear and definite to enforce.

Rescission

Rescission is another equitable remedy that allows a party to cancel or “unwind” a contract, putting both parties back in the position they were in before the contract was formed. This remedy is appropriate when there has been a material breach of contract or when the contract was entered into based on fraud, duress, or mistake.

In Texas, a party seeking rescission must promptly act upon discovering the grounds for rescission and offer to restore any benefits received under the contract. If the court grants rescission, the contract is treated as if it never existed.

Reformation

Reformation is an equitable remedy that allows a court to modify the terms of a contract to reflect the parties’ true intentions. This solution is applicable when there has been a mutual mistake or when one party has engaged in fraud or inequitable conduct.

To obtain reformation in Texas, the party seeking the remedy must provide clear and convincing evidence of the parties’ true intentions. The court will then modify the contract terms to align with those intentions.

Attorney’s Fees

In Texas, a party may be entitled to recover attorney’s fees in a contract dispute if the contract provides for such recovery or if a statute authorizes it. For example, the Texas Civil Practice and Remedies Code allows for the recovery of attorney’s fees in breach of contract cases.

To recover attorney’s fees, the party seeking the fees generally must succeed in his or her breach of contract claim and provide evidence of the reasonable fees incurred.

Contact a Fort Worth, TX Business Lawyer

Contract litigation can be a challenging process. However, by understanding the potential remedies available under Texas law, parties can make informed decisions and work towards resolving disputes. When faced with a contract dispute, you should consult with a Fort Worth, TX business attorney who can evaluate your case and advise you on the most appropriate remedies for your specific situation. Call Gonzalez Law, PLLC at 817-349-7330 for a free consultation.