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What is the best possible resolution to a breach of contract?

| Apr 16, 2021 | Breach of Contract

If a supplier, service provider or employee violates their contract with your company, there could be financial consequences. The nature of the breach and the relationship with the person or business who did not fulfill their obligations to your company will impact how serious the issue is for your company and the steps that you should take to resolve it.

Sometimes a breach of contract occurs because of unexpected issues, like a sudden decline in the supply of necessary components or a personal illness that prevents someone from doing certain work. Other times, mistakes, oversights or confusion can lead to a breach of contract.

If the other party didn’t intentionally violate your contract, the best-case scenario involves you reaching out informally and their responding by correcting the mistakes. For those facing a breach of contract that the other party won’t take responsibility for, taking legal action may be the only way forward.

Filing a breach-of-contract lawsuit can give you leverage for negotiating

Some people think that they can walk away without consequences when they fail in their obligations to others. They may have engaged in similar behavior with other clients or customers in the past without anyone standing up to them.

By filing a civil lawsuit, you alert the other party to how serious you are about pursuing the matter. This might motivate them to sit down and address the issue. Negotiating a settlement outside of court could benefit both parties by helping you resolve things amicably now. If they aren’t willing to work with you, you will then get to plead your case in front of a judge.

Push for the results that will best serve your business

Once you know that litigation is inevitable, you need to determine what outcome would be the best for your company. Do you want the judge to award you damages for the costs or lost sales that you suffered because of someone’s non-performance or breach of contract? Do you want the judge to order the other party to follow through with their obligations?

You will have to decide for yourself what outcome to pursue based on your needs. Typically, so long as you can validate the contract itself and show proof of the breach, you can expect the courts to help you enforce it. Analyzing the contract for any weaknesses and trying to initiate negotiations prior to litigation can be important steps for those trying to minimize the financial impact of a contract issue.

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