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Can specific performance help resolve service contract issues?

On Behalf of | Nov 7, 2022 | Business Litigation

Businesses execute contracts both for goods and services. Service contracts are often particularly important to a company’s daily operations. Maybe you have outsourced your HR department and rely on a third-party service provider to keep you in compliance with employment laws. Perhaps you need to remodel your company facilities and hired a local construction company for the project.

There are numerous reasons why you may have a service contract with another company. Especially if you have already paid a deposit for the services that you require, you expect the other party to follow through with their obligations to your business.

Unfortunately, service providers can fail to finish a project or may complete the promised in a manner that is incongruent with your original agreement. Your company may need to file a civil lawsuit to resolve the issues. Is specific performance ordered by a civil judge the proper solution to your breach of service contract issue?

How specific performance works

During a breach of contract lawsuit, the judge hearing the case has the authority to void the contract or theoretically enforce it. When a judge orders specific performance, they can compel either party to follow through with their contractual obligations or to perform certain services that would be necessary to remedy the breach. If the other party still fails to perform their required services, they could face serious penalties, including criminal consequences related to contempt of court.

For those who still require the services previously agreed upon with the other party, specific performance could be beneficial. An order from a judge could force a construction company to finish the remodeling project they left half done.

However, especially if your contract is for ongoing services, you may realize that the dispute affects your ability to trust the performance of the other party. You may not want specific performance as a solution to your breach of contract issue if you don’t trust the other party to provide you with appropriate services anymore because of their conduct.

There may be other solutions available, including damages paid to compensate you for any losses your company suffered as a result of the breach of contract. Considering the different solutions for a serious breach of a service contract will help you advocate for the best outcome in your civil case.