Dealing with breaches of contract

Contracts are made because the outcome is beneficial for both parties involved. But in the business world, several problems may arise that complicate contracts and lead to disputes. A business contract is an agreement that creates certain rules and obligations to be followed by both parties. Failure to follow these obligations is called a breach of contract. A contract breach may occur in several different ways, depending on the terms.

A breach of contract usually upsets one of the parties, and they might want to enforce terms of the agreement. They might also wish to claim compensation and financial reward for any harm caused by the alleged breach. Most parties try to resolve their issue in an informal manner to make sure the contract stays intact. The next step would be a lawsuit, which gives a judge authority to resolve the issue. The parties may also choose a mediator to review the dispute and help work toward a resolution. This is called alternative dispute resolution and is usually used to stay away from courts and legal fees.

Once a contract has been breached, several steps might be taken as a remedy for the situation. The victim of the breach has the right to claim financial damages for the breach of contract. This is the most common way of resolving such disputes. In some cases, the damages might not be sufficient incentive for the non-breaching party. Thus the court may force the breaching party to perform the duties as written in the agreement. This is called specific performance. The non-breaching party may also cancel the contract and subsequently sue the breaching party.

If you are part of the contract that has been breached, it may be best to contact an experienced attorney. It is important to take the advice of an attorney before making any decisions.