How A Breach Of Contract Should Be Handled

27 April 2018
 Categories: Law, Blog


When two businesses make a contract with one another, they are obligated to uphold their end of the contract. If someone doesn't fulfill the expectations set out in the contract, there are various remedies the other business can take. 

Read the Contract Carefully

A good contract should lay out exactly what is expected of each side. It should set dates, monetary amounts, and other numbers in stone. It should also set clear performance expectations and quality standards. When these things are in place, it is much easier to point to a specific part of the contract and say, "You didn't fulfill this obligation." It's harder to prove that someone is not performing their role when that role is vague. 

Look in the contract for any escape clauses that may apply. For example, the contract might say that the other person must do a certain thing unless a certain condition occurs. Escape clauses are used to control for situations that are outside of the other party's control. For example, if they didn't deliver a product on time, but it was because one of the company's warehouses experienced a fire or there was a natural disaster that destroyed critical equipment, there may be an escape clause that applies.

Read over the contract with your commercial litigation attorney to see how ironclad the contract is and if you're within your rights to pursue legal action. Also, make sure there is nothing in the contract that would allow the opponent to escape scot-free in litigation. 

Give Any Applicable Notices and Follow Contract Procedures

The contract you signed may say that you can pursue a remedy for a contract breach by giving notice to the other party. They would have a specified number of days to correct the problem. If it is not fixed to the standards set in the contract, you might be able to simply call the contract null and void. In other cases, you can pursue further legal action if this issue has cost your business money or productivity. 

Look at the contract again to see if you are prohibited from litigation, or if there is a specific mediation process you need to follow. You wouldn't want to turn around and violate your own contract as you are trying to enforce it. 

The next step is likely to be the start of commercial litigation. Secure a knowledgeable commercial litigation lawyer to begin this process on the right foot.