A breach of contract may be defined as a broken promise. Something that stems from an individual’s failure to fulfill any term of a contract without a lawful excuse. Maybe you hired a developer to build your company’s website and they stop midway through the job without giving you the password, or perhaps a handyman never finished the job or performed shoddy work. Another common breach of contract involves employees who quit to go to work for the competition, one of the reasons Nike sued some of its designers who decided to abandon the company for rival Adidas, as Oregon Live reports.
These tips can help you resolve a breach of contract without having to sue, no matter what the reason, whether you live in Hamilton, Ontario, Los Angeles, California or anywhere else. Oftentimes, simply sending a demand letter will do the trick as few people want to face a lawsuit, especially when it’s obvious they’re in the wrong.
Try to Work It Out
Before sending any type of formal notice, or threatening a lawsuit, make an attempt to work it out more informally. That can save you time, money and potentially even the working relationship. Never threaten to sue just to get out of a deal that isn’t as lucrative as you thought it would be as it’s likely to backfire, particularly if you’re bluffing, which can lead to a long, drawn-out court battle.
Send a Notice of Breach
If you’re unable to work it out with the other party, the next step is to send a “Notice of Breach,” which creates a record of the date the party that breached the contract is officially told – that can be important if a dispute ends up in court. The notice must indicate which part of the contract was breached. For example, did the other party fail to perform, such as not delivering goods or services, or not paying you for what you provided? Or, maybe they made it impossible for you to perform your obligations? No matter the reason the breach occurred, it’s important to identify all contract clauses affected and list them out. If there is more than one, they should all be listed with the strongest claim first.
Don’t be melodramatic, instead, stick to the facts using a professional tone. If it goes to court, it won’t look good in the eyes of the jury or judge if you have a bullying tone.
In many cases, sending a Notice of Breach will allow both parties to come to a satisfactory solution on their own.
Arbitration or Litigation?
If the breach of contract can’t be resolved without intervention, the next option is either arbitration or litigation. Arbitration involves submitting the dispute to a neutral third party to help resolve it and is much more cost effective than litigation. It’s also much quicker and less cumbersome than having to go to trial. An agreed-upon arbiter is selected to hear the dispute and issues a decision that’s binding.