Every business, at some point, will likely face challenges related to a contract breach. A breach occurs when one party fails to fulfill its end of a contractual agreement.
When faced with this situation as a business owner, it’s important to understand the possible remedies available and methods that one may want to embrace when seeking a resolution.
You may want to start, for example, by initiating a conversation with the party that has breached the agreement in question. Sometimes, a straightforward discussion can clarify misunderstandings or unforeseen issues without unnecessarily escalating tensions. A mutually agreeable solution might be achieved without further action, saving both time and resources.
If a discussion does not produce desired results, you’ll want to review the contract before taking any formal action. Make sure that you have a clear understanding of the obligations, rights and potential remedies specified within the agreement. This understanding will serve as a foundation for any further steps you may opt to take.
Sometimes, the circumstances surrounding the breach might suggest that renegotiating certain terms of the contract is the best way forward. This could involve altering deadlines, modifying payment terms or changing service expectations.
There are also times when seeking a direct remedy is more appropriate. If a financial loss was incurred due to the breach, for example, your company might be entitled to monetary damages. This could include compensatory damages (direct losses), consequential damages (indirect losses) and, in particularly severe cases, punitive damages.
Finally, in situations where monetary compensation isn’t the desired outcome, you can potentially seek a court order for specific performance, compelling the breaching party to fulfill the original obligations, and/or you could move to terminate the contract in its entirety.
If you are facing a breach of contract, don’t hesitate to seek legal guidance to better safeguard your company’s interests. Each situation is unique and pursuing personalized feedback and support is generally wise before committing to a particular course of action (or inaction).