Contracts are essential to running a business and are used in almost every situation involving an agreement or transaction. A written contract is better than an oral contract because the terms of the agreement are written down, eliminating reliance on conflicting memories about the contract’s exact terms. Nonetheless, even written contracts can fail when they are poorly written, creating opportunities for misunderstandings that can evolve into disagreements about contract terms. Eventually, these disagreements can become lawsuits. If your business was named as a defendant in a breach of contract lawsuit, RKPT can protect your interests and work towards an optimal resolution to your case. Contact us today to schedule an appointment to discuss your situation with one of our commercial litigation attorneys.
Steps for Responding to a Breach of Contract Claim
Contract disputes are a common source of business disagreements. When left unresolved, they can lead to breach of contract litigation. Unfortunately, a contract’s shortcomings are often not recognized until a disagreement arises and the parties discover the contract does not resolve the dispute. When the contracting parties disagree over their entitlements and obligations, that disagreement can form the basis for the allegations identified in a breach of contract lawsuit.
If your business is facing a breach of contract claim, several options are available to try to resolve the disagreement.
Examine the Terms of the Contract
The first step in responding to a breach of contract claim is to carefully review the terms of the contract and any correspondence with the other party. An attorney can determine whether the contract was valid and can provide advice on whether you violated its terms. In some cases, paying the damages for a breach may be less expensive than fulfilling the original contract terms.
Communicate with the Other Party
Communicate with the other party to attempt to resolve the matter amicably. Depending on the nature of the alleged breach of contract, you may be able to extend a deadline, provide a partial refund, agree to additional services, or identify another compromise that preserves the business relationship.
However, be thoughtful in your response and consider consulting with our commercial litigation attorneys first. Your response could become a part of future legal proceedings, and you want to avoid inadvertently committing to something.
Consider Renegotiating the Terms of the Agreement
When a party realizes they cannot meet the requirements of a contract, it may become necessary to renegotiate the terms of the contract. Renegotiating a contract can provide flexibility and realign the contract’s terms with the current realities and limitations of the parties’ business relationship. This preserves the relationship while establishing more reasonable expectations.
Identify the Other Party’s Non-Performance
If the other party failed to perform its duties under the contract, you may be able to cite their non-performance as a reason for your alleged breach. You consider identifying their non-performance and providing them with an opportunity to correct their breach.
Contact a Breach of Contract Lawyer
While it may be tempting to try to resolve legal matters on your own, when dealing with commercial litigation, it is wise to seek assistance from an experienced business lawyer. Our attorneys can evaluate your situation, protect your interests, and guide you through the stages of trying to resolve a breach of contract claim without resorting to litigation. But if litigation is necessary, we have the experience to help your business successfully navigate the challenging process of a commercial litigation claim.
Prepare for Possible Litigation
Your company should also prepare for the possibility of being named as a defendant in a breach of contract lawsuit. Gather evidence in support of your position, including invoices, receipts, letters, emails, and other correspondence, and identify witnesses who might be called to testify.
Defenses to a Breach of Contract Claim
If the other party files a lawsuit, you will receive a copy of the complaint. The complaint will identify the facts the other side believes warrant money damages or specific performance of the contract.
Meet with your lawyer to discuss your available defense and how your business wishes to respond. Your business may have defenses for not performing your obligations under the contract. Common defenses to a breach of contract claim include:
- Abandonment - the contract was effectively terminated by mutual consent because one party’s actions were inconsistent with the existence of a contract.
- Accord and satisfaction - the dispute was resolved by alternative or substitute performance that was performed and accepted, thereby eliminating the original obligation.
- Mandatory arbitration - the contract calls for resolution of disputes through arbitration.
- Fraud or misrepresentation - the contract may be unenforceable if a party justifiably relied on a known misrepresentation of a material fact.
- Impossibility - the contract cannot be performed because circumstances have changed.
- Unconscionability - the contract is unenforceable because it was made in an unfair manner.
- The statute of limitations expired - failure to file a lawsuit within a certain period of time can mean the legal claim cannot be asserted.
- Failure to mitigate damages - the plaintiff had a responsibility to avoid further damages based on a breach of contract but made little effort to do so.
- Waiver - the plaintiff’s conduct shows they voluntarily and intentionally relinquished a known right provided in the contract they are trying to enforce.
Our commercial litigation attorneys can identify and raise legal and factual defenses to breach of contract claims.
Contact an RKPT Office Today
A breach of contract claim is not just inconvenient and disruptive. Defending against the claim can interfere with business operations and customer relationships.
Our attorneys can provide guidance and legal advice at every step of the process. We will:
- Review the contract to determine whether a breach occurred.
- Communicate with the other parties to explore potential resolution.
- Identify and quantify potential damages.
- Represent your business in settlement negotiations and alternative dispute resolution (ADR) forums.
- Provide guidance and advice to help you navigate the court process.
RKPT’s commercial litigation attorneys have extensive experience representing businesses in high-stakes breach of contract claims throughout the Midwest and in Florida, including Southern Ohio and Northern Kentucky.
We offer practical, proactive legal advice to minimize the likelihood of litigation. And when litigation is the only option, we provide cost-effective solutions to meet the needs of our clients.
To put our expertise to work for you, call (513) 721-3330 or contact the business attorneys at RKPT today.
