Is Your Business Involved In A Contract Breach?

Every well-run business does due diligence before signing a business agreement with customers, employees or partners. Still, they may find themselves involved in a contract breach. Not every dispute involves litigation; ideally, the two sides can work out a solution, but sometimes a court hearing is the only way to settle the matter.

Two kinds of litigations

While contracts involve a variety of arrangements, there are two types of breaches:

Minor breach: This generally involves failing to meet the conditions of the agreement, but the damage consists of a delay or late delivery, and there is little or no direct impact on the plaintiff’s bottom line. Despite the breach, payment should still be made in full or meet the conditions outlined in the contract.

Material breach: This is more serious. Generally, it involves the non-delivery of goods or services or not providing the agreed-upon deliverables. The plaintiff can seek damages for the substantial harm caused by the breach.

Fighting the plaintiff’s claim

Just because the plaintiff files a lawsuit doesn’t mean the defendant did something wrong. Valid grounds of defense include the following:

• Enforcing the contract violates the law.
• The terms were impossible to meet.
• The plaintiff used fraudulent means to secure the agreement.
• The contract had an error, which the plaintiff was as aware of.
• There was no payment for goods or services listed in the contract.

Litigation experience is often key

Many business law attorneys draft and negotiate contracts. It is much less common for them to handle litigation, so working with a business law attorney with trial experience is vital. Litigators can help clients determine the best course of action and whether litigation is the solution.