A contract is a written agreement that helps clarify the obligations of one party to another. Putting your agreement in writing makes it easier to enforce in court and reduces the likelihood of confusion or miscommunication affecting your performance.
A contract can determine how much you pay for supplies or what support services an outside staffing company will provide. Contracts help determine what your workers can do while they work for you and sometimes after they leave your company if your contract has restrictive covenants. Overall, contracts help you make business operations predictable and minimize risks.
Unfortunately, if the other party to a contract does not uphold their end of the agreement, your company could suffer the consequences of their failure. You can lose money if you don’t receive a timely delivery of supplies. You can face unfair competition if a worker violates their noncompete agreement.
How can the courts help you resolve a breach of contract that affects your business?
They can directly resolve the conflict
When a breach of contract issue goes in front of a judge, they will review the claims and the original contract. Then they will determine what the best resolution could be, given the situation.
They might invalidate the contract and end the agreement between the parties. They might award one party damages if the breach has caused financial losses. A judge can also order specific performance, which essentially compels one party to complete certain tasks. Specific performance could compel a contractor to finish work on one of your buildings, for example.
Going to court can lead to a settlement
You don’t necessarily need to litigate in open court for the civil courts to help you resolve a contact issue. Once you file a civil lawsuit, the other party will have more motivation to settle with you.
Many business-to-business contracts disputes don’t go to court but will instead reach a resolution before the court date arrives. Simply filing the lawsuit can help you resolve the conflict because the other company stands to lose more in litigation.
Exploring how business laws protect your company in a contract dispute scenario can help you decide the best way to handle a breach of contract.