Agreements make the business world go round, and for your company, they are essential. Contracts are some of the most common legal documents, especially in business since you need to ensure that your company’s needs get met by exchanging goods and services with other businesses.
What happens when a company you associate with breaks a contract that leaves you in a bind? Find out some common reasons for a breach and what you might expect.
What constitutes a contract breach?
Whenever a business fails to adhere to one or more of the terms of a contract it is in breach. In some instances, a company may foresee that a breach will occur and inform you of such. This anticipatory breach gives you time to either renegotiate the terms or find alternative suppliers of those goods or services.
Too often, however, when a breach happens, it is due to one party’s failure to uphold its end of the agreement in either not providing what it promised or not adhering to the specified timeline. Either of these breaks can set your own company back and cause you to face financial and reputational damage.
What can you do in a contract breach situation?
When another business breaks a contract, the language in the document should provide guidance on the course of action available. The remedies often involve financial damages, including actual and anticipated loss due to the breach. In some cases, you may avoid litigation through arbitration or mediation. Absent compliance from the breaching party, you have the right to go to court, in which case, you may also receive costs related to that process.
If you want to ensure your contracts contain breach remedies or need assistance with a breach, contact our firm for guidance.
