A party failing to follow through on contractual obligations is a common occurrence that can throw individuals and business owners for a loop. So what can you do if you are on the losing end of a breach of contract? Although there are legal remedies available, it is important to determine whether filing a lawsuit is the most effective course of action. Before suing someone, the best contracts lawyers recommend that you speak to an attorney and find out whether it is worth your time and money.
Do You Have a Viable Case?
The first thing to do is to figure out whether you have a viable breach of contract case. An attorney can determine whether you have a cause of action by breaking a potential lawsuit down into certain elements. Factors that influence whether you have a good case include:
Contract formation – You must demonstrate that you entered a legally binding contract with the other party. Of course if you have a written agreement that is signed by both parties, this element is easier to prove. Determining whether you have a legally enforceable oral or implied contract based on your specific situation is more challenging.
Performance – You must also prove that you met your obligations under the terms of the contract. For example, if you are selling property and did what was required according to your real estate sales agreement but the other party reneged on the deal for an invalid reason, your real property lawyer may recommend that you go to arbitration or sue to keep all or a portion of their earnest money deposit.
Breach – Proving that the other party failed to meet their contractual obligations can be an uphill battle, especially if it is for something like a contractor doing shoddy work, as these determinations can be subjective. Having a lawyer by your side is critical to ensuring you have the necessary proof to demonstrate a breach.
Damages – Finally, you must establish that you suffered economic losses due to the other party’s breach of contract. Although you may think that proving this element is fairly straightforward, in certain circumstances it can be quite complex.
Can You Collect What You are Owed?
It is also vital to determine whether the other party can pay if you obtain a judgment against them. If you know that they do not have the funds, there is no point in suing them. However, if an individual or business has plenty of resources to pay what they owe, your attorney can look into different ways to collect, including wage garnishment, liens or other attachments to assets.
Alternatives to Litigation
Settling a dispute outside of a courtroom is usually more expedient and less expensive. Your attorney can negotiate with the party directly or you can hire a mediator to a solution that works for everyone. Many contracts include an arbitration clause, which means you are required to go through binding arbitration instead of filing a lawsuit. There are exceptions to this rule if the terms of the agreement are deemed unconscionable or unfair. Using alternative dispute resolution is usually your best bet when dealing with a business partner. One way to potentially avoid this type of situation is to have a business succession planning attorney help you create a framework for what will happen if one partner leaves the business.
Dealing with breach of contract issues can be stressful and overwhelming. Our experienced team of contracts lawyers, business lawyers, estate planning attorneys and lawyers who deal with wills can help you resolve almost any type of legal issue you may be facing.