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Steps to take to address a potential business breach of contract

On Behalf of | Jun 25, 2020 | Contracts

Contracts provide stability and structure to business operations. Whether you have a contract with a staff member or a supplier, you know you can rely on the other party to perform their contractual obligations or provide you with materials or supplies.

When someone does not fulfill their side of a contract, that can put you in an unpleasant situation. You may have no choice but to take enforcement efforts in order to resolve the breach of contract and minimize its impact on your business.

Enforcement should start with verification

Before you take any other steps, you need to review the contract and the circumstances to make certain that there was a material or significant breach of the contract. Once you have looked at the contract and confirmed that it addresses the exact situation you currently hope to remedy, you may want to make a copy of that language in order to provide it to the other party.

The contract may also outline what steps you can take to address of breach. If it does, you should follow that process. If it does not, informal communication with the other party could be a good first step toward enforcement.

Reach out and explain your concerns

Once you know that the other party is in violation of your contract, it is typically wise to let them know about the breach and to ask them to correct the problem. Doing so informally, possibly through an email or even a text message, is a good first step. That way, they know that you’re still willing to work with them. However, if they don’t respond or if they refuse to make the necessary corrections to address the breach of contract, then you may need to take more decisive action.

Send a letter requesting resolution and then follow up promptly

If informal attempts at contact were unsuccessful, sending a formal letter, like one drafted by a lawyer, is sometimes a good next step. You can advise the other party of exactly how they are in breach of a contract and how you expect them to remedy it. You should also advise them that you will take additional enforcement action if they don’t resolve the situation quickly.

Be sure to give them enough time to make a resolution possible, but also be ready to take the next step and actually file a claim in court in order to enforce the contract or seek compensation for their breach of it if they don’t correct the situation in a timely manner.

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