Equitable remedies are a complex aspect of the New York commercial litigation process for many individuals. Equitable remedies are a category of contractual remediation designed to resolve breach of contract situations. Legal remedies are the other main category of contractual remedies and they allow the non-breaching party in a breach of contract case to recover monetary damages. Equitable remedies are decided upon by the court with the purpose of resolving the breach or dispute. In most cases, a court will only grant an equitable remedy when legal damages are not an option. Equitable remedies are only considered when monetary compensation is not significant enough to recover the damages created by the breach of contract.
What Types of Equitable Remedies Are Available?
Three major types of equitable remedies are available to the non-breaching party in a breach of contract dispute, including specific performance, contract rescission and contract reformation. Specific performance is a court order that requires the party who breached the contract to uphold their end of the agreement according to the terms of the original contract. This may include delivering contractually promised goods or rendering services that have already been paid for. This form of equitable remediation has the most in common with standard legal remedies that provide monetary compensation to cover any damages. Contract Rescission, sometimes referred to as rectification, is used when the original contract was breached, rescinded or canceled. In this case, the court will order that a new contract is written to clarify your needs as well as any other parties involved in the contract. Contract reformation involves rewriting the original contract so that it more accurately reflects the intentions of the agreement. In order to qualify for a contract reformation, you must have a valid contract currently in effect. Contract reformation may result in your entire contract being rewritten or merely the part that was ineffective. Judges may use any of the three equitable remedies at their own discretion. Typically, a court will consider previous business dealings and the bargaining power of each party involved when determining which remedy is most appropriate.
Is It Possible to Obtain Legal and Equitable Remedies?
Generally, a court will only consider an equitable remedy if monetary compensation is not an option, so it is uncommon to have both legal and equitable remedies in place. Specific performance is especially unlikely to be enacted if legal remedies have been pursued. In most cases, courts favor monetary compensation over equitable remedies. However, in some cases you may be entitled to monetary compensation as well as an equitable remedy under rules of equity or restitutionary damages. These damages are a very specific remedy awarded to recover a limited type of breached contract damages. Restitutionary damages are intended to prevent one party from benefiting unjustly from the breach of contract. This may occur if one party has received promised services without paying for them. In this case, the judge may impose restitutionary damages to prevent that party from benefiting unjustly from services he or she did not pay for.
Contact a New York Commercial Litigation Lawyer
Equitable remedies vary significantly from one case to another, making them a difficult issue to navigate alone. From drafting a clear contract that prevents disputes to seeking compensation once a breach of contract has occurred, legal consultation may help take some of the guesswork out of the remediation process. Contact New York commercial litigation lawyers from Hiller, PC today at (212) 319-4000 for more information on successfully pursuing equitable remedies in court.