Everyone would love for their business to succeed and every deal they make to be profitable. Plus, wouldn’t it be fantastic if every vendor you used, a subcontractor you brought in, or a consulting firm you hired to improve your operations met and even exceeded your expectations? However, that’s not how the real world works.

Often contract agreements between businesses become disputed when one party is unsatisfied with how the agreement was executed. What are you supposed to do then?

What is breach of contract?

This is where the legal concept of breach of contract comes into play. Contracts should outline deadlines for project completion, specific tasks or work needed to complete the project and give each side a solid estimate of the costs for the project.

If you are a commercial real estate developer rehabbing an older building for upper-scale lease tenants, you may have a contract with a company specializing in commercial bathroom upgrades or electrical updates. You may want the electrical work completed first, by a set date, to allow the bathroom remodels to take priority next. What if your contractor handling the HVAC has significant material delays? What if no one shows up for a week when you had a project date listed in the contract? What if shoddy work prevents your building from passing a building code inspection?

That’s breach of contract.

What happens after breach of contract?

You can sue for breach of contract. However, most commonly business look to come to an agreement so to meet the terms of the contract. Perhaps, your electrical contractor will cut you a deal on its labor costs for the project. Perhaps, it will agree to compensating you for business losses due to delays. Perhaps, it will bring in extra crews to complete the project on time.

If negotiating a dispute over a contract agreement fails, then businesses are more likely to file a lawsuit. Consult an experienced business law attorney in this situation. Contracts are made to protect your interests and you want someone who can advocate for a fair compensation in the case an agreement breaks down between you and another business. Otherwise, what good are the contracts you negotiate in the future?