A breach of contract occurs when one party does not live up to its end of a contractual agreement. As a business owner, you could find yourself in that situation with vendors, customers, and other professionals you encounter. If another party has failed to honor a contract, here are some steps you can take.
Review the Contract
Although you might believe that the other party has breached the contract, you need to be sure before you can take action. Review your contract and make note of the conditions that the party was supposed to follow.
While reviewing the conditions of the contract, make note of how the contract was breached. For instance, if the vendor failed to supply products ordered, note which products, the date of the expected delivery, the payment for the products, and how you were impacted by the failure to follow through on the contract.
Contact the Other Party
Even though the other party did breach the contract, your next step is not necessarily to head to court. It is possible that the other party would be willing to make amends for its failure to honor the contract.
Although contacting the other party by phone would be quicker, you need physical proof of your attempts to settle the matter. Send an email or a certified letter to the other party. In the notice, include all of the details you collected while reviewing your contract.
Offer a way to settle the issue in the notice. Using the previous example, you can ask the vendor to supply the products ordered at a discounted price by a certain date or request a full refund.
It is important that you are open to negotiations. It is possible that the other party will respond with a counteroffer. If you do not accept the terms, you can counter with your own proposal.
File a Lawsuit
If you do not receive a response to your notice or you are unable to reach an agreement with the other party, you can file a lawsuit based on the breach of contract. You will need to prove that the contract was breached and that you were harmed by the other party's action.
In the time period leading up to the court hearing, you can still continue to attempt to settle with the other party. If you do reach an agreement, notify the court. However, if you cannot reach an agreement, you can still present your case in court.
Consult with an attorney experienced in business law to determine if there are any other legal options you can exercise to resolve the breach of contract. For instance, consider a firm like Strauss Troy.
My name is Linda and my husband and I recently opened a small business. Since we didn't know anything about being business owners, we hired a business attorney to make sure that we followed all the necessary rules and regulations for small business owners. Our attorney made sure everything ran smoothly for us so that we were ready for our grand opening. If you're considering opening a business, this blog will help you understand all the legalities that's associated with running a business. I wanted to make this information easily attainable so that everyone who wants to open their own business can begin to make their dreams come true.