If there is one term that can strike fear into the hearts of business owners and joy for the lawyers representing each side, it must undoubtedly be: “breach of contract.” This term can cover a multitude of alleged wrongdoings, but generally covers the issue of one or more parties failing to adhere to the terms of a contract that has been hashed out over months, if not years, and was designed to ensure that all parties are happy with a deal. In some cases, a breach can be remedied relatively easily. In contrast, others might involve lots of legal wrangling to bring those who have committed the violation to the fore and be punished for their transgression. In any case, there are specific steps that must be adhered to if you want to keep everything above board and legal.
Seek Legal Counsel
Even if you have an in-house legal team, it’s often prudent to bring in an outside team of crack lawyers who can take a more impartial approach to any resolution. Because of the complexity of such legal issues, you will need to ensure that you hire dedicated breach of contract lawyers who understand this field and have the requisite experience to facilitate a peaceful resolution for all parties involved and minimize potential conflict. If you have an in-house legal team, they can liaise together in order to come up with a plan of action that is based on the reality of the situation and based on the information provided by your own lawyers. If you’re a smaller business or sole trader, then it is crucial to hire the right law firm that can take the reins on what is typically a massively complex situation. The things to look out for when choosing the right firm include:
- Expertise in contract law: It should go without saying, but to ensure better odds, you really ought to research firms that specialize in this specific field of law.
- Expertise in your particular industry (if possible): Although this isn’t always possible, depending on your industry and where you’re located, if you can find an attorney versed in your industry, it could boost your odds even further.
- A strong track record: Because of how challenging these issues can turn out to be, it will pay dividends to pay extra for a lawyer with a proven track record in winning these kinds of cases.
- Clear communication: You might find that litigation will drag on longer than anticipated for numerous reasons. However, having an attorney who regularly keeps you updated will go a long way in alleviating the stress involved.
- Fee structure: These cases don’t often come cheap, but if you consider the fee structure and what you can afford, you can reduce the impact on your finances.
Review The Contract With Your Management Team
When you first receive a breach-of-contract notice from the other party or discover that the other party has potentially breached the contract, your first step outside of acquiring legal help is to review the contract with those responsible for its creation. This might be you and your management team if your organization is large enough, or simply sitting down by yourself if you’re a sole trader and going over it yourself. This will allow you to gain valuable insights into whether you are in the wrong if the contract was poorly constructed, and if the other party is to blame. Giving yourself a deeper understanding of the contract allows you to get a larger overview and discover if the points of contention are valid.
Maintain Positive Communication With The Other Party
Whatever happens throughout this case, it is vital to maintain professional and cordial relations with the other side. This might not always be possible if the other side is flagrantly in breach and has shown no genuine regard for remedying things, but in most instances, it can pay to resolve the problem positively for all. There are plenty of times when a breach of contract has been accidental or misunderstood without prior intention. In these cases, by maintaining cordial relations, you may still be able to salvage the agreement and continue to do business upon completion of a positive outcome.
Consider Alternative Dispute Resolution If Possible
In some cases, you may be able to resolve your issue in alternative ways other than litigation. Exploring alternatives to litigation can save time, reduce costs, and preserve relationships, which can be critical if this case happens to be between you and a long-term client. You can consider using options such as negotiation between partners to hopefully resolve the problem without resorting to more serious forms of resolution. Alternatively, mediation and arbitration could fix the issue and get things back on track.
Plenty of businesses encounter a breach of contract every day. As long as you know how to deal with it, you should be able to resolve the situation while maintaining good relations and continuing to do business.
