Update: When Is Injunctive Relief Available in a Breach of Contract Case?

 Posted on June 29, 2024 in Business Law

Update: Below, we discuss the role that injunctions can play in litigation related to a breach of contract. However, it can be helpful to understand specific situations where injunctive relief may be an option. Some examples of cases where parties may seek injunctions include:

• Theft of clients: Former employees, partners who have left a company, or other parties to business contracts may violate non-compete agreements and attempt to lure clients away from the company. To prevent the loss of business, a company may seek an injunction preventing these actions. While the FTC has taken steps to ban non-compete agreements, there are still some situations where they may be used and enforced, including in contracts with people who serve in executive positions.

• Intellectual property violations: When parties enter into licensing agreements that allow for the use of intellectual property (IP)  such as patents or trademarks, the owner of the intellectual property may need to take action to prevent improper uses of their IP. An injunction may require the offending party to stop any uses of IP that could create confusion for consumers.

• Breach of fiduciary duty: Parties who have entered into partnership agreements or shareholder agreements may be accused of taking actions to benefit themselves at the expense of the company. An injunction may prevent these parties from continuing this behavior.

• Real estate contracts: During a real estate transaction, one party may attempt to back out of purchasing or selling property. In these situations, the other party may seek an injunction to require the transaction to be completed as originally specified in the purchase agreement.

When parties who have entered into a contractual agreement encounter disputes in which one party allegedly breached the contract terms, litigation may be required to resolve these issues. In many cases, the plaintiff in a breach of contract case will seek to recover damages from the other party, and these damages may address the losses that occurred because of the breach, including both direct and indirect losses. However, a plaintiff may also ask the court to require the defendant to take or refrain from certain actions. This is known as injunctive relief, and it will usually only be granted if a plaintiff meets specific legal requirements.

Injunctions and Specific Performance

In many cases, a contract will include an injunctive relief clause stating that one or both parties are entitled to relief to prevent them from suffering harm due to a breach of contract. If a party pursues litigation to address an alleged breach of contract, it may ask the court to issue an injunction against the other party. In some cases, temporary injunctions may be used while a case is ongoing, or a permanent injunction may be issued at the conclusion of the case.

In many cases, an injunction will prevent a party from taking certain actions. For example, if a former employee is accused of violating a severance agreement by failing to follow the terms of a non-compete clause, their former employer may ask the court to issue an injunction preventing the employee from engaging in competitive activities. Other types of injunctions, which may be known as mandatory injunctions or specific performance, may require a party to take certain actions, such as performing the work that a person agreed to do as part of a contractual agreement.

To be granted injunctive relief, a party will generally need to prove all of the following elements:

• Without the injunction, there is a substantial likelihood that the party will experience irreparable injuries, such as permanent damage to a business’s reputation.

• The injuries suffered by the party asking for an injunction outweigh any losses that the other party would experience due to the injunction.

• Issuing the requested injunction would not go against the interests of the public.

• If a temporary or preliminary injunction is being requested, the party requesting the injunction is likely to win the case.

Contact Our Fort Lauderdale Contract Dispute Lawyer

At The Elliot Legal Group, P.A., we can help determine whether injunctions may be available in breach of contract cases. We work to protect our clients’ rights as they address violations of contracts, providing legal representation during legal proceedings and ensuring that the correct steps are taken to prevent further harm. To set up a consultation, contact our Broward County breach of contract attorney at 754-332-2101.