Business owners in the greater Toledo metropolitan area know the importance of contractual duties and obligations. When another party doesn’t perform their duties under a contract, this is known as a breach of contract, and there are several different options to remedy the situation when this occurs.
Damages versus specific performance
If the contract breach can be remedied with a payment of money, the breaching party can be required to pay a certain amount to the non-breaching party. There is no set amount; however, it is generally the approximate amount that the non-breaching party has lost because of the contract terms not being fulfilled.
If money damages are not a practical remedy, the breaching party may be legally required to perform their duties under the contract. This type of remedy commonly occurs when the contract terms call for a unique or specific result, such as a musician composing a song, or an actor performing a role in a play.
Depending on the circumstances, the contract may be cancelled altogether, or the breaching party may sometimes be required to pay additional monetary penalties, in addition to the amount called for under the contract. Both parties are always free to come to their own agreement on the solution to the breach.
If an agreement cannot be reached between the contract parties, a court must decide what penalties should be imposed. Ohio law requires that all breach of contract claims less than $15,000 in value be filed in the Municipal Court, while claims for more than $15,000 be filed in the Court of Common Pleas.
Contracts are vital to any business, and when contracts are breached, a business can experience significant complications. Resolving breach of contract disputes can be complex, and it’s important to learn all your potential options for resolution.