Commercial leases, employment agreements, third-party vendor contracts, and construction subcontracts are among the many types of contracts that your business might enter. With the vast number of contracts that most businesses are bound to enter, breach of contract lawsuits are among the most common types of litigation that businesses face. If you’ve been involved with a contract breach, you may be asking yourself some of these questions:
Do we have a valid contract?
The first thing to know if you are either considering bringing a lawsuit or find yourself defending against one is if a valid contract exists. Although there are some exceptions, a contract can be valid whether it is in writing or oral. This means that even if someone made a promise to you but you didn’t get it in writing, you may still have a legal remedy for their breach of the agreement.
Did someone breach the contract?
Any time that a party to a contract fails to follow through on one of its terms, that party has breached the contract. However, it is important to consider the effect of any particular breach when you are deciding whether to pursue a breach of contract lawsuit. A court will usually only provide relief for a “material” breach of contract. Therefore, a minor breach that does not cause any harm will probably not be worth pursuing, especially if you are trying to maintain a business relationship with the other party.
What are the legal remedies for breach of contract?
The most common remedy for a breach of contract is requiring the other party to pay enough to get you back to where you would have been if the other party had not breached. Alternatively, a court may require the other party to pay back any money it gained because of its breach, or pay back any money you spent in reliance on the other party’s promise. Finally, a less common remedy requires the other party to actually perform its side of the bargain.
If you are faced with a breach of contract lawsuit, it is important to consult an experienced litigation attorney to answer these and the many other questions you are bound to have. Your contracts are part of what makes your business work, so you should understand both what rights they give you and how you can preserve those rights.