Contracts are an important part of any business, which means that a breach of contract may be a possibility. If your employees, service providers or suppliers fail to fulfill their contractual obligations, it may cause disruptions and delays to your business.
Fortunately, there are a number of remedies for breach of contract disputes. However, the most appropriate remedy will depend on the nature of the breach, the terms of the contract and the circumstances surrounding the breach.
Here are three remedies for breach of contract issues:
1. Communicate with the other party
After a breach of contract, the first thing you can do is to try and communicate with the other party. However, if your attempts to negotiate fail, you may need to issue them a demand letter, which constitutes a formal notice and demand for them to resolve the issue.
2. Attempt alternative dispute resolution (ADR)
If your business incurs damages, the next most appropriate step is to reach a settlement agreement with the other party. You can do this by attempting alternative dispute resolution methods like mediation or arbitration.
When done right, ADR may help resolve a breach of contract dispute without going to court. However, for this dispute resolution method to work, some amount of cooperation is needed from both parties.
3. End the contract and seek damages
When a breach of contract happens, you may lose trust in the breaching party. In such an event, you may be wary of working with them, especially if it’s a serious breach. At this time, you may consider ending the contract. However, if you’ve incurred significant financial losses due to the breach, you may ask the court to award you damages for those losses.
While going to court may be the last resort after a breach of contract, filing a lawsuit against the other party may prompt them to cooperate or communicate more openly.
If a breach of contract happens, taking the proper steps may help you to resolve the issue. However, although it may be a good idea to resolve the situation on friendly terms, you may need to go to court if the other party refuses to make good on their obligations.