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How does litigation help your company solve a breach of contract?

On Behalf of | Aug 2, 2022 | Business Litigation |

Contracts help you make business operations predictable, but the risk is always there of someone failing to fulfill their end of the agreement. When another business or an individual breaches a contract, your company may struggle as a result.

If a supplier doesn’t deliver materials that you require to run your restaurant or if a former employee violates their non-disclosure agreement by starting a viral Twitter thread about your company, there could be real financial damages that result. You have the right to take an individual or business that violates a contract with your company to civil court.

What are the possible benefits of pursuing breach of contract litigation?

You can limit your business’s losses

If you recognize that you will not be able to continue a business arrangement with the other party because of their conduct, your goal in breach of contract litigation may be to absolve yourself with future obligations to the other party while seeking compensation for the damages they cause.

Other times, such as when they provide goods or services that are difficult to source, you may want to request specific performance. A judge can order the other party to make good on their contractual obligations to your company.

Finally, pursuing a lawsuit in court may result in a judge awarding you damages. If you can show the financial impact of the breach, such as lost sales or staffing costs when your facility was idle, the courts may award you some or all of those damages in the breach of contract suit.

You help motivate the other party to compromise

Although it may seem counter-intuitive, filing a lawsuit over a breach of contract issue is often one of the best ways to resolve the matter without going to court. When the other party realizes that you will pursue the matter all the way to court if necessary, they may be more likely to cooperate with you and negotiate a mutually beneficial solution before your hearing.

As an added benefit, going to court over breach of contract matters will let other companies that do business with you and future clients understand that your company expects everyone to uphold their contracts with it. Initiating breach of contract litigation will help resolve the underlying contract issue and compensate you for the consequences of the breach.