In situations where legal remedies are deemed insufficient to provide sufficient restitution, a party may be granted equitable relief, which is a court-granted remedy requiring a party to act or refrain from performing a specific act.
How Fair Relief Operates
Equitable relief is used to prompt or prevent action when a legal remedy would not be sufficient restitution for the contract breach or other offense. It is different from a legal claim, such as monetary compensation. A court injunction, which enforces the remedy by punishing non-compliance with civil or criminal penalties, is frequently used as this prompting.
The inclusion of an acknowledgement between the parties that legal relief would not compensate for a breach of contract or that a breach would result in irreparable damages or injury, as well as the recognition that a breach of contract could lead to the offended party seeking an injunction or other form of equitable relief, are common requirements of jurisdictional clauses that provide for equitable relief.
Additionally, the offended party must be found completely innocent of any wrongdoing in the dispute. The “clean hands” principle, which is sometimes invoked, may be used to refuse equitable relief in cases where the aggrieved party has not acted wholly in good faith or has unnecessarily postponed seeking redress.
Monetary compensation is not the same as equitable relief.
Just Compensation in Real Life
A breach of contract almost always results in the need for equitable remedy. Rescission of a contract, which eliminates all terms and obligations and puts both parties back in their pre-contract positions, is a frequent type of equitable relief. These frequently happen in property-related contracts because a party’s personal value of the property often exceeds its monetary value. A judge may void the agreement or order that the property be sold in accordance with its original terms.
Rectification is the process by which a court orders a contract to be revised in order to better reflect the intentions of both parties—basically, to state what was initially understood. If they are discovered to have violated the terms of a contract, they may also order that the obligations contained in it be carried out exactly as written.
When sensitive data, such as intellectual property, is stolen or obtained illegally, equitable relief is frequently granted. For example, in cases of intellectual property theft, gag orders are frequently issued to prevent a party from publishing sensitive information. In these situations, monetary compensation would not be sufficient to address the possible business or reputational risks facing the party that disclosed the improperly obtained information.
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