You sign contracts with your employees, suppliers and clients to protect your business. You need to know that your workers aren’t going to disclose information that could hurt your business and that you’ll have the materials you need to continue daily operations.
When one party to a contract does not fulfill their obligations, your business could find itself in a difficult position. It could face unfair competition or incur significant expenses. Ignoring a breach of contract sets a dangerous precedent and also means that your business simply has to absorb those losses.
Thankfully, you can directly negotiate with the other party or take them to court for the breach. There are many possible solutions, but the three listed below are the most common.
Demand specific performance
A contract outlines exactly what obligations each party has to the other. You expect that someone you sign a contract with will follow through with the promises they made to you. When they do not, you may need them to make good on what they promised you.
During negotiations about the breach, you could demand that they fulfill their obligations. You could also ask a judge to order specific performance that compels them to follow through. Failure to do so after a court ruling could constitute contempt of court.
Negate the contract to end your obligations
Contracts usually involve each party doing something for the other or making some kind of confession in return for a valuable consideration. If the party you contracted with does not fulfill their obligations to you, you may want to simply terminate the contract.
That way, you don’t have any future business dealings with an individual or company you cannot trust. Either through negotiations or a court order, you could effectively void the contract and find someone else to fill those needs for your business.
Seek monetary damages
A breach of contract will usually have some kind of financial implication for a company. The bigger the loss your company suffers, the more important asking for damages could be. You will generally need to be able to show actual financial losses to convince a judge to award you damages in a breach of contract case.
Considering the breach itself and your relationship with the other company or individual can help you decide what solution would be best when dealing with a breach of contract issue.