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Consider these steps when a breach of contract occurs

On Behalf of | Oct 11, 2021 | Uncategorized |

Contracts are an important part of transacting business. But there is always a possibility that a party may not meet its obligations and breach the contract.

At first, it is helpful to be fair and agreeable with the at-fault party. Consider taking steps that do not jeopardize a business relationship or become costly.

Alternative dispute resolution

Sometimes the situation may be resolved without the need of breach of contract litigation for business owners. There are alternative methods of dispute resolution that are less expensive and time-consuming. ADR requires both parties’ cooperation.

Mediation provides the opportunity of crafting a solution that meets the parties’  needs. A neutral mediator helps the parties reach their agreement and avoids the risk of litigation that can lead to an unwanted outcome.

Arbitration is a more formal process than mediation. Both parties present their cases before an arbitrator or panel in a proceeding that has less formalities than a court trial. The arbitrator rules on a resolution which can lead to a settlement or agreement.

Reach out to the other party

A misunderstanding of the contract’s requirements or extenuating circumstances may have led to the breach. Rewriting the contract can help resolve this and keep the contract profitable for both parties.

If both parties intend to preserve their business relationship, they may discuss their problems and craft a mutually agreeable solution. Contracts should be reviewed routinely to address business growth and changing needs and capabilities.

Damages

If discussion or arbitration cannot resolve the breach, ascertain the amount of damages caused by the breach. This also helps determine whether litigation is viable and worth the cost or damaging of a business relationship.

Damages may include outstanding payments, lost revenue, and expenses caused by the breach. A court can also order specific performance where the other party must perform specific actions such as making up missed payments or modifying their processes.

Lawsuit

Other matters also need considered to determine whether litigation is viable. These include whether there is sufficient evidence to support your case and if the suit may be timely filed within the statute of limitations.

Additionally, consider how well the contract was previously enforced. If there were multiple breaches which were unaddressed, it is less likely that a court will enforce the current breach. Anticipating defenses from the other party is also essential.

An attorney may provide you with reasonable options. They can also assist you with pursuing your rights in litigation.

 

Board Certified Civil Trial Lawyer

Dana Watts is a board certified civil trial lawyer by the Florida Bar Board of Legal Specialization with more than 30 years of litigation experience. He also received an AV* peer review rating through Martindale-Hubbell.

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