When someone defaults on their obligations to your company, they will inevitably cost your business money. Whether you have to obtain supplies or services from an alternative and more expensive source or you delayed delivery for a client and trigger a penalty clause in your contract with them, there are countless ways that a breach of contract could damage your company financially.
The unfortunate truth is that resolving the breach can also prove expensive. Litigating a breach of contract matter could cost you thousands of dollars when you have already taken losses because of the other parties non-compliance or nonperformance. How can you resolve a breach of contract matter with less conflict and expense?
Try to reach a solution outside of court
It is always wise to verify that the delay or failure by the other party is an actual breach of your contract by checking the terms you included in it. When you have reviewed your contract and are certain that the other party breached your agreement, you can send them a warning letter or email advising them of the issue and asking them to resolve it. If you have a long-standing relationship with the company, a phone call could go a long way.
If they refuse to address the issue or do not respond to you, then you may need to prepare for a lawsuit. Just because you file doesn’t mean you will have to go court. After you file the initial paperwork, you will then be in a position to suggest mediation or to attempt negotiations again.
The truth is that the vast majority of business lawsuits settle before the parties involved ever see a judge. Once the other party knows that you will follow through and enforcing your contract, they may finally start cooperating with you and agree to negotiate. You will be in a position to achieve the best possible solution given the circumstances and potentially preserve your relationship with the other party so that you can continue doing business with them.
Taking the right steps to resolve a breach of contract issue that can reduce the long-term Financial impact it has on the company.