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Can you resolve a business contract breach without going to court?

On Behalf of | Dec 8, 2022 | Business Law |

Although you can theoretically enforce a verbal agreement, written contracts are the standard for a reason. When you and another party work with one another in some context, your contract determines what obligations you have to one another.

From the timeline of completing a project to the amount of money one party will pay the other, the terms that you set in your contract guide your relationship and may help make upcoming transactions or business operations more predictable. Unfortunately, you could very well sign a contract with someone who feels follow through with their promises to you or your business.

A breach of your business contract might mean major financial losses for your company. Do you have to go to court to hold the other party accountable?

Many business disputes settle outside of court

It may seem like you have no choice but to sue the other party, but you won’t necessarily have to attend a court hearing after you file the initial paperwork. It is quite common for business disputes with pending lawsuits to get resolved before the hearing ever occurs. In other words, while you may not actually need to go to court, you may need to prepare to go to court to speed up the resolution of the conflict.

Bringing in a lawyer to notify the other party of their defaults can help if they have not responded appropriately to your informal attempt at resolving the issue. If they are still unresponsive or refuse to meet you halfway, then finally the necessary paperwork to initiate a lawsuit can help. When faced with impending litigation, those obviously in breach of the contract made finally agree to negotiate with you or fulfill their to you under the contract.

Considering that a judge could order them to fulfill the contract and might also award you damages, the other party might see the benefit in negotiating with you.

Mediation may be a viable option

Provided that you reach an agreement in your mediation session, you could dismiss the pending lawsuit and move on with your relationship. You can negotiate and potentially settle the dispute while preserving your agreement to work together.

Sometimes, going to court is necessary. There are numerous scenarios in which you will not be able to resolve a breach of contract issue outside of court. If the other party simply doesn’t acknowledge their failings or if they claim to not have the resources or ability to fulfill their agreement with you anymore, then a judge may be the only one that can rectify the situation. Knowing what steps to take in a breach of contract issue will help you better protect your company.