What to Do When Facing Breach of Contract

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You depend on your vendors and suppliers to deliver the goods and services you need to operate your business. When those vendors and suppliers fail, it can hurt your relationship with your customers and cause your business to experience a financial burden. In cases where other parties don’t hold up their end of the bargain, your business can bring about a breach of contract lawsuit.

Contracts make business possible in so many ways. They help you lock in pricing with vendors so you can better budget for your business and they set forth the terms of your agreement. This helps you protect yourself from harm and allows for a consistent experience for your customers.

But when it all goes wrong and you need to get out of a contract due to your vendor or supplier not holding up their end of the deal, you might need a Virginia business law attorney to help. Here are some areas to consider when dealing with breach of contract.

Breach of contract legal remedies

There are a variety of ways to settle breach of contract situations. The majority of these remedies include paying out monetary damages. Here’s a look at a few of these monetary resolutions.

Restitution: the party that breached the contract can be required to repay the other party the money they received for the service. For example, if you ordered goods or services that were not delivered on time or in the manner set forth in your contract, the company can be required to repay all funds you paid out to receive those goods or services.

There may be cases where you still used the product or service, but its delay or less-than-perfect status led to damages to your or your company. Even though you still used those items, the other company can be required to pay back the money you spent on them.

Compensatory damages: this is the most common resolution for breach of contract situations. In a compensatory damages agreement, the business that committed breach of contract must pay your business the amount you spend to get the same service elsewhere.

For example, you pay $1,000 for a monthly supply of a product that does not arrive and that you then have to go out and spend $1,500 for elsewhere. The company committing breach of contract must then pay you $1,500 because that’s what the incident cost your business.

Other arrangements: nominal damages require that the party committing breach of contract only pays a small fine for its mistake. This is used in situations where neither company suffers financial damage for the breach of contract.

There is another remedy called liquidated damages in which the parties come to an agreement on a fee to resolve breach of contract. Finally, there’s quantum meruit in which a business pays for the portion of the work that was completed. So if you have a builder working on a new office for you and you aren’t pleased and want to seek a new builder, you would pay for the portion of the project that your builder completed.

Injunctive relief in breach of contract cases

In breach of contract cases where no financial agreements can or should be made, the court can order an injunctive relief. There are two broad categories of injunctive relief.

Contract cancellation: in some cases, the best resolution to breach of contract is to dissolve the contract. This allows both parties to walk away and seek out more fitting business arrangements. It doesn’t involve either party paying out a sum of money but simply agreeing that the contract is now moot.

Completion of goods or services: at times, you might not be able to find a new vendor or supplier for the goods or service agreed upon in your contract. In those situations, it’s best to have the other organization complete the contract. A court order stating that they must uphold their end of the deal can protect your business in cases of breach of contract.

Hiring a Virginia business law attorney

Gore and Kuperman are trusted advisors for your Virginia business law needs. We’ll examine your contracts and the terms that your suppliers or vendors violated. Our confidential counsel will give you confidence that your business is protected and receives its just dues in all business agreements.

From never receiving product to it arriving late or damaged, we’ll ensure that your suppliers make good on their promises when things go wrong. You don’t have to live with faulty business relationships simply because you’re still within a contract term. Breach of contract is a reason to step away from that agreement and you have a right to do so.

When your business needs help in negotiating contracts or ending contract relationships, contact Gore and Kuperman to take the step in the success of your business. Contact us for a free business law consultation at 703-385-7300.

 

This blog post is not legal advice, nor is it intended to be used as such. Specific case facts should be discussed with an attorney.