Equitable Remedies for Breach of Contract in California

If you are currently involved in a contract dispute in California, you may have heard about the possibility of equitable relief. Breach of contract equitable remedies may be confusing to the average layperson, but it's worth understanding the basics - if the court decides that your claims are entitled to equitable relief, then you'll have an entirely different set of remedies than you would have otherwise had access to.

Equitable Relief - the Basics

Equitable relief is a specific category of relief in California breach of contract. Equitable remedies have a unique and storied history that stretches back all the way to the courts of medieval England, but we don't have to worry about that here! For our purposes, however, equitable relief can perhaps best be described as non-monetary relief (though there are exceptions, and some remedies in equity are fundamentally monetary in nature) - this runs in stark contrast to more typical "legal" remedies, which give the plaintiff access to monetary relief.

Equitable relief is generally granted by the court when legal, monetary relief is not available, or is otherwise improbable or unusually challenging to recover. Let's illustrate this contrast with a quick example.

Suppose that you are suing the breaching party for failing to perform their duties under the contract at-issue. The breaching party refused to paint a mural wall on your art exhibition property - this mural was intended to draw initial waves of visitors to the property, and to generally serve as an advertisement (and initial marketing spark) for the exhibition. The breaching party is a famous local artist who is widely known for their signature mural painting style.

Now, if the defendant were an "average" painter of little renown, it might be fair to say that monetary relief would suffice. In this particular case, however, the contracted services cannot be fully accounted for with monetary damages. You might therefore qualify for equitable relief in the form of specific performance (i.e., the painter may be compelled to perform their duties under contract and complete the mural). Specific performance remedies can be quite difficult to secure when the defendant demonstrates a clear desire not to perform their duties under contract, so you'll want to work with an experienced contract attorney who can either successfully obtain a specific performance remedy, or who can (to the degree possible) negotiate a monetary award that reflects the substantial damages suffered.

Equitable Remedies Available in Breach of Contract Actions

There are a number of equitable remedies that may be available, depending on the circumstances. Consider the following.

Specific Performance

Specific performance is an equitable remedy in which the breaching party is forced to complete their duties under contract. It is generally only available in cases where the actual monetary losses cannot be reasonably calculated, or where monetary relief will simply not suffice to make the plaintiff "whole" again. Specific performance typically depends on the unique qualities of the goods/services being exchanged. For example, a real estate transaction may be compelled (pursuant to a specific performance remedy) due to the fact that the parcel of property is unique and a monetary award would not account for the loss of those unique qualities.

Reformation

Sometimes, both parties are willing to continue performing their duties under contract if the contract itself could be modified - under such circumstances, reformation of the contract may be a superior remedy to simply terminating the contract and paying out monetary damages. Reformation is often proper in cases where the contract is "on the whole" reasonable, but contains portions of misrepresentative language or oppressive clauses.

Contract Rescission

If a contract is unsalvageable, the court may "cancel" the contract (rescind the contract) and have an entirely new contract drawn up and executed.

Injunction

Court-ordered injunctions may require that the breaching party take action or stop certain actions. For example, suppose that the defendant has committed trademark infringement. Their restaurant chain uses the same name (and a very similar logo!) as yours, causing substantial customer confusion. The court enjoins the defendant from using the trademark any longer - the defendant must therefore change their name and their logo.

Restitution

Restitution is the only monetary form of equitable relief. It is available in quasi-contract cases where a valid, enforceable contract does not necessarily exist, but where the defendant was unjustly enriched due to the provision of goods/services by the plaintiff. For example, suppose that you do not enter into a contract with the defendant, and the defendant uses your fleet of cars for several months to provide their employees with company car access (for sales trips). The defendant has unjustly enriched themselves. Restitution damages may be available.

Restitution damages may be less than other monetary damage relief, as it only returns to the plaintiff the value of the goods/services they provided. Profits will not be considered.

Schedule a Free Consultation with an Experienced San Jose Contract Attorney

Attorney Brian J. O'Grady - for over 35 years - has successfully served individuals and commercial entities in breach of contract actions involving a broad range of issues, including those that involve equitable relief.

Equitable remedies in breach of contract actions (and related actions) are necessarily complicated, and here at O'Grady Law, we understand that the inherent complexity of such actions may be overwhelming to those who have minimal experience in contract litigation. We are committed to working closely with clients throughout the litigation process - we strive to keep the client involved every step-of-the-way. This client-centered approach has paid substantial dividends over the years, helping us favorably resolve contract disputes on behalf of our various clients.

Call (650) 318-6131 or submit a brief online form to get in touch with Brian J. O'Grady today for a free consultation and evaluation of your claims.