Business contracts are meant to help ensure smooth transactions and provide clarity on rights and responsibilities for all parties involved. However, sometimes, one party to a business contract may indicate possible breach by demonstrating an intention or likelihood of not fulfilling their obligations.
In Ohio, anticipatory breach of contract can be remedied using several strategies. These may include the following.
1. Specific performance
The non-breaching party may seek specific performance as a remedy for anticipatory breach of contract. Specific performance is a legal remedy where the court orders the breaching party to fulfill their contractual obligations as agreed upon in the contract. This remedy is typically sought when monetary damages would not adequately compensate for the harm caused by the breach.
2. Claim damages
Anticipatory breach of contract can result in financial losses for the non-breaching party. To remedy this, the non-breaching party may assert a claim for damages caused by the breach. This includes direct losses like lost profits and expenses, as well as foreseeable consequential damages. By claiming damages, the non-breaching party seeks compensation for their losses, aiming to restore them to their pre-breach position.
3. Rescission
Rescission involves canceling the contract due to the breach, essentially voiding its terms and releasing both parties from their obligations under it. This remedy aims to restore the parties to their positions before entering into the contract, eliminating any further legal or financial entanglements. Rescission is typically pursued when the breach is significant and irreparable and when neither specific performance nor damages adequately remedy the situation.
4. Injunction:
Another remedy is seeking an injunction, which involves obtaining a court order to prevent the breaching party from taking actions that worsen the breach or harm the non-breaching party further. For instance, it can stop the breaching party from selling assets mentioned in the contract. Injunctions are crucial for maintaining the status quo and safeguarding interests until the dispute is resolved.
If you are involved in a business contract dispute, legal counsel can help you understand the options available to you and guide you through the process of pursuing the most appropriate remedy for the anticipatory breach.
