Navigating Breach of Contract Claims: Essential Steps for Business Owners

A breach of contract occurs when one party fails to fulfill their obligations as stated in a legally binding agreement or contract. It essentially means that one party has not performed the duties or promises outlined in the contract. Navigating breach of contract claims can be a complex process for business owners. It is important to handle such claims carefully and strategically to protect your rights and interests. Here are some essential steps to consider when dealing with breach of contract claims:

1. Review the contract: Start by carefully reviewing the contract in question. Identify the specific terms and conditions that have been breached and understand your own obligations under the contract.
2. Document the breach: Gather all relevant evidence related to the breach of contract. This may include correspondence, emails, invoices, delivery receipts, or any other documentation that supports your claim. It is crucial to have a clear record of the breach and its impact on your business.
3. Communicate with the other party: Reach out to the other party involved in the contract to discuss the breach. It is important to maintain open lines of communication and attempt to resolve the issue amicably. Clearly communicate your concerns and expectations regarding the breach and seek a mutually acceptable resolution.
4. Consider alternative dispute resolution (ADR): In many cases, it is beneficial to explore alternative methods of resolving the dispute before resorting to litigation. ADR methods such as mediation or arbitration can be less time-consuming and costly compared to going to court. Both parties must agree to participate in ADR.
5. Consult an attorney: If the breach cannot be resolved through negotiation or alternative dispute resolution, it is advisable to consult with an experienced business litigation attorney specializing in contract law. A commercial litigation attorney can assess your case, provide legal advice, and guide you through the legal process.
6. Evaluate damages: Determine the extent of the damages caused by the breach of contract. Calculate the financial losses you have incurred as a result of the breach. This may include direct costs, lost profits, or other related expenses. Having a clear understanding of the damages will help you in seeking appropriate compensation.
7. Send a demand letter: If informal negotiations fail, your business litigation attorney can draft and send a demand letter to the breaching party. The demand letter should outline the specific breach, the damages incurred, and a request for appropriate remedies or compensation. It serves as a formal notice that you intend to pursue legal action if the matter is not resolved.
8. Explore settlement options: Throughout the legal process, be open to settlement discussions with the other party. Settlement negotiations can save time, money, and the uncertainty of litigation. Assess the pros and cons of any settlement offers and consult with your attorney to make informed decisions.
9. Initiate litigation, if necessary: If all attempts at resolution fail, and you believe that pursuing the matter in court is the best course of action, your attorney can help you initiate a lawsuit for breach of contract. The litigation process will involve filing a complaint, gathering evidence, attending court hearings, and presenting your case to a judge or jury.
10. Follow court procedures: If the breach of contract claim proceeds to court, ensure that you adhere to all court procedures and deadlines. Cooperate with your attorney, provide requested information, and attend all necessary court proceedings. Being organized and prepared will strengthen your position during litigation.

Remember, these steps are general guidelines, and the specific approach may vary depending on the circumstances of your case. It is essential to consult with an experienced business litigation attorney who can provide personalized advice based on your business’s needs and the applicable laws in your jurisdiction. To contact one of Pike & Lustig’s experienced business litigation attorneys, call 561-291-8298 and we will be happy to discuss your case.