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3 steps to take when a business partner breaches your contract

On Behalf of | Sep 26, 2023 | Business Litigation

In business partnerships, contracts are the bedrock upon which trust and collaboration are built. These legally binding agreements outline the expectations and obligations of all parties involved.

Unfortunately, there may come a time when a business partner fails to meet their contractual commitments, leaving you with a breach of contract situation. Handling such a breach can be complex and challenging, but fear not. Knowing the essential steps to take when a business partner breaches your contract can help you overcome this problem as effectively as possible.

Identify the breach

The first and most crucial step in dealing with a breach of contract is to review the terms, conditions and obligations outlined in the agreement. Pay special attention to the specific clauses the other party has failed to fulfill.

Once you’ve identified the breach, it’s essential to document it meticulously. This documentation will serve as critical evidence if the dispute escalates. You should include the following:

  • Dates and times of when the breach occurred
  • Detailed descriptions of the breach
  • Any correspondence related to the breach, such as emails or written notices

Before taking legal action, consider opening a line of communication with the other party. Clearly express your concerns and the specific contractual obligations that have been breached. A dialogue may lead to an amicable resolution.

Review dispute resolution provisions

Many contracts include provisions for dispute resolution, such as mediation or arbitration. These methods offer a (potentially) more cost-effective and less adversarial way to resolve conflicts than going to court. Check your contract to see if such provisions exist and follow the prescribed process.

Pursue legal action (if necessary)

When all else fails, and the breach of contract cannot be resolved through negotiation or alternative dispute resolution approaches, you may need to file a lawsuit. In a breach of contract case, you may be entitled to various forms of damages, like:

  • Compensatory damages to cover financial losses
  • Punitive damages to punish the breaching party
  • Liquidated damages, as specified in the contract

A breach of contract scenario can be challenging, but enlisting necessary legal support can help you to effectively address the situation and help to protect your business and personal interests alike.