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What happens in a breach of contract?

The agreement you make with another business or provider is crucial to provide your company with the necessary services and goods. However, one of the most significant calamities to strike a business is a breach of contract.

When you rely on another entity for something that winds up delayed or does not happen, it can set your business back. Find out what happens when a contract breaks and what you may do to recover from it.

What constitutes a breach of contract?

A contract legally memorializes the agreement between you and the other entity for goods or services. It includes a price for the exchange, applicable terms and conditions and a timeframe. If the party you contracted with does not fulfill any part of the contract, it is a break or breach.

What options are available to fix it?

The way you go about rectifying a breach depends on the type and scope. It also relies heavily on what the contract says will happen should a break occur. In many situations, once any portion of the terms and conditions of the agreement does not happen, you may move for remedies. Some contracts may have remedies that should occur before going to court, while others may allow you to file suit right away. When you determine the contract is no longer viable, you may terminate it and move for compensation.

Understanding your options for a breach may help you move forward after it happens. While it is never ideal to get into business with someone who does not do as proposed, it is better to find out sooner rather than later.

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