Businesses that enter into an agreement ideally fulfill them with mutually beneficial results. One side gets services they need to be more competitive, and the other side increases their bottom line, or they can work collaboratively on a large project with each party showcasing their strengths for a better end product.
Unfortunately, plans outlined in an agreement do not always come to pass. There may be issues beyond the control of the parties in the agreement, disputes over payment, problems with late delivery, or the expectations outlined in the contract were not met. These are all reasons for one side to claim that there has been a breach of contract.
Why claim a breach?
It can be frustrating when one side does not meet expectations. However, it becomes a more significant issue if the breach leads to financial harm. Litigation may be necessary if initial attempts to resolve the dispute or otherwise coerce the other party to fulfill their end does not work.
Why it’s best to avoid a breach
Companies who do not take these issues seriously, do so at their peril. Reasons to avoid a breach include:
- Damage to reputation: Pittsburg is a small town, and word of a company not honoring their agreements can negatively impact their bottom line.
- Damage to a relationship: Unlike mediation, business relationships that involve litigation seldom survive.
- Lawsuits are distracting: Resources involved in a lawsuit cannot be used to bring in more business or stabilize the bottom line.
- Lawsuits are expensive: There are filing fees and legal fees when a company goes to court.
- Punitive damages: A judge may levy additional sums as punishment.
- Specific performance: The ruling may include honoring the contract.
- Contempt: Those who do not take these matters seriously may be held in contempt of court.
Legal guidance can avoid costly mistakes
Businesses with a dispute involving a breach of contract often find it best to work with litigators who have experience using mediation or arbitration out of court. These knowledgeable attorneys can start by trying to resolve the matter through negotiation, and then can shift to an effective courtroom presence to get the best possible results.