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An example of this in a case involving contracts would be a party seeking an interpretation of the contract to determine their rights . Another example would be an insured individual seeking a specific determination of their rights and surrounding circumstances regarding insurance coverage under a specific policy.
Declaratory relief aims to clarify legal rights and obligations, while a motion for summary judgment resolves the case without a trial.
A declaratory judgment is a binding judgment from a court defining the legal relationship between parties and their rights in a matter before the court. When there is uncertainty as to the legal obligations or rights between two parties, a declaratory judgment offers an immediate means to resolve this uncertainty.
However, a declaratory judgment is not a ruling on damages or compensation. Parties seeking damages or compensation would need to file a separate lawsuit.
Declaratory judgments are frequently sought in the insurance context, either before or after a claim has been denied. Unlike an injunction, which orders a party to take certain actions, a declaratory judgment simply defines the legal relationship between the two parties under the insurance contract.