After You Signed the Contract — It Is too Late to Bargain Doctor

The Restrictive Covenant in your contract is preventing you from joining a great practice option locally. Ignoring the restrictive covenant is considered a breach of contract. What are the potential outcomes of a claim for breach of contract?

Case Study

JD finishes a cardiology fellowship in structural heart disease. He seeks his future cardiology career at a large cardiology practice in a large city with many practice options. The World-Famous cardiology group offers him an opportunity to join the group to practice cardiology. JD assumes he will be able to use all his interventional skills. When he joins the practice, it becomes clear he will not be able to use his interventional skills because two senior physicians are doing the interventional work.

JD is very disappointed and talks to the group’s chief of cardiology that says he will be able to perform interventions when one of the senior operators retires. JD is disappointed and starts to seek out other cardiology options. A group that practices within the geographical limits of his restrictive covenant offers him a position with a guarantee that he can perform interventions. JD wants to break his contract obligations.

Introduction

Litigation involving an alleged breach of contract can be complex. When one party fails to fulfill their obligations as outlined in a contract, this can lead to disputes, and the other party may take legal action to enforce the contract’s terms. For those who are involved in civil litigation related to contract disputes, it is important to understand the options that may be available. An experienced attorney can provide legal representation in these cases, ensuring that issues related to contracts will be handled correctly. Depending on the specific facts of a case, available remedies for a breach of contract may include:

Specific Performance: In some breach of contract cases, the court may order the party who breached the contract to fulfill their obligations as originally agreed upon. Specific performance is typically granted when monetary damages would not adequately compensate the non-breaching party for the losses they suffered due to the breach; or when the breaching party has the ability to fulfill the contract’s terms.

Monetary Damages: The most common outcome when one party has been found to be in breach of contract is an award of damages that will be paid by the breaching party to the non-breaching party. There are different types of monetary damages that may be awarded:

• Compensatory damages: These are intended to cover the actual financial losses incurred by the non-breaching party because of the breach.

• Consequential damages: These may address losses that were not directly caused by the breach but were reasonably foreseeable at the time both parties entered into the contract.

• Liquidated damages: Some contracts include provisions specifying predetermined amounts that will serve as compensation if either party breaches certain terms. If the non-breaching party can demonstrate that the other party committed an applicable breach, these types of damages may be awarded.

• Punitive damages: In cases where there was intentional misconduct or gross negligence by the breaching party, that party may be required to pay punitive damages as a form of punishment.

Rescission and Restitution: In certain cases, the court may order the rescission of the contract, which essentially cancels it out or places the parties back into the position they were in before they formed a contract. This is typically done when one party can prove that they entered into the contract based on fraudulent or misleading information provided by the other party. In addition to rescission, restitution may also be ordered to restore both parties to their pre-contract positions.

Reformation: If a contract contains ambiguous or unclear terms, the court may choose to reform or modify those terms to make them enforceable so they reflect the true intentions of both parties involved. Reformation aims to correct mistakes or resolve ambiguities in contractual language.

Termination: In some cases, breach of contract litigation may result in the termination of the agreement altogether. This means that neither party will be required to fulfill their obligations under the contract moving forward.

Conclusion

The presented case study and the consequences of a potential breach of contract outlined above reify why every physician needs an attorney with medical employment contract expertise prior to signing a contract to practice medicine. The potential risks associated with breach of contract and the cost associated with litigation make it imperative for physicians to act upfront securing legal advice before signing a contract. Most medical contracts are written in favor of the employer. Also, the cost of litigation for the large employer is insignificant compared to the financial and emotional cost to the physician.