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The doctrine of freedom of contract allows contracting parties to agree on the nature and scope of the remedies that will be available in the event of a breach of their contract.
One possibility is that the parties will choose a remedy that is not otherwise provided for by law, for example, by agreeing that any disputes should be referred to arbitration or conciliation rather than by bringing an action in court.
Another possibility is that the parties will agree, in advance, on the amount of damages that should be payable in the event of particular kinds of breach, and restrict themselves to claiming these damages.
In other cases, the parties agree to special procedures that must be followed in the event of a dispute, such as requiring notice in writing and time to respond.
The variety of agreed remedies is not limited and varies from case to case. Generally, agreed remedies will be enforced provided they do not amount to penalties.
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