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3 legal solutions to resolve a serious breach of a business contract

On Behalf of | Dec 27, 2021 | Business-Employment

You create contracts to protect your business and make daily operations predictable. When you have contracted workers, you can depend on enough staff members showing up for a shift. When you have a contract with a supplier, you never have to worry about running out of the produce you need for your deli.

While you may always adhere to the contract that you signed with other businesses and individuals, the other party to a contract won’t necessarily be as diligent. If someone else breaches your contract by failing to pay you or otherwise acting contrary to what they promised to do, what are some of the possible legal solutions available?

Send them a written warning

If someone failed to deliver goods, has not paid the balance on an invoice or violated their employment contract after leaving your company, you may want to notify them about their violation of your agreement.

Sending someone a written notice informing them of how their actions or inaction have violated your written agreement might get them to resolve the issue. If nothing else, they may communicate with you to help you understand when and how they will resolve the matter. If they do not, then you may need to take them to court.

File a breach-of-contract lawsuit

One of the main reasons people execute written contracts is to have an enforceable agreement. When the other party violates the terms of your contract, you potentially have the option of filing a civil lawsuit.

A judge can verify that the contract is valid and enforceable and potentially help you resolve the matter. They could effectively terminate the contract so that you no longer have obligations to the other party. The judge could also order specific performance and make the other business or individual follow through with the promises originally made in the contract.

Seek compensation for your losses

In addition to resolving the dispute about the contract, litigation or even settlement negotiations give you an opportunity to ask for compensation. You could seek damages in court or negotiate with the other party so that they pay you for the impact that their breach of contract has had on your business.

When you understand the various ways to resolve a business contract dispute, you can make better decisions about how to handle an ongoing contract issue.