Contracts are the lifeblood of modern business. They help establish obligations between different companies and provide businesses with dependable services or materials. Committing your agreements with another business to writing can protect you.
Sadly, some individuals and businesses won’t uphold their end of an agreement as outlined in your contract. They might fail to deliver products, not perform a service that you paid for or try to change the previously agreed-upon price, completion date or other terms that are crucial for your business.
When the other party in a contract breaches the agreement, you may have no choice but to take action against them. If they won’t correct things immediately when you point out the breach, filing a lawsuit can push them to respond more appropriately.
Filing a lawsuit does not mean you have to go to court
Some business owners or executives are reticent to file a lawsuit because they assume that means they will have to go over everything in a courtroom with a judge. While your filing could lead to litigation, it could just as likely push the other party to finally compromise with you.
Knowing that you are serious enough to take things to court might motivate the other party to make things right or fulfill their obligations to you. Other times, they might at least agree to negotiate a settlement to avoid the expense and possible embarrassment of a breach-of-contract lawsuit.
The courts can help you address the impact of a breach of contract
If someone didn’t perform a service your business required, like installing new machinery, you could have lost days of productivity, costing your company tens of thousands of dollars. The same is true for undelivered supplies that are necessary for manufacturing a product.
A breach of contract will typically have provable consequences for your business. Showing a judge the contract and documenting how the breach has affected your business’s operations can make it easier for you to secure a positive outcome.
A judge could undo the contract and void your obligations to the other party. They might order the other party to pay damages. They can even order specific performance, which involves ordering the other party to fulfill their obligations to you.
Being proactive about a breach of contract will help you recoup any losses you suffered and also remind the businesses that you contract with that you expect them to follow through on their promises.