What Happens After a Breach of Contract?
When a company is hired by a customer or client to perform services the two parties enter into a contract. More often than not this is a written contract. Should the customer fail to pay you for your services after they’ve been completed this is a breach of contract. This is a sad situation that many companies have to deal with on a regular basis. People are simply untrustworthy, which is why many companies require deposits at the beginning of projects to cover at least some of the costs associated with them. Let’s take a look at what happens after a contract is breached in today’s post.
Remedies Available for a Breach
If you have experienced a breach of contract there are a few remedies available for your company. The actions you take following a breach of contract are entirely up to you. The remedies available include seeking damages, asking for something specific to be performed, and cancellation of the contract with restitution.
If you choose to seek damages you will try to recoup money spent during the length the contract was in effect. This is best done by filing a lawsuit against the party that breached the contract. You can sue for damages that include unpaid bills, money spent on equipment, personnel and other items related to the project.
If you go the route of seeking a specific performance, this means you will want the person who breached the contract to perform an activity related to the contract. This is typically a court-ordered measure following the breach of a contract. This remedy is usually called upon when damages will not sufficiently solve the problem of the contract being breached. The court can order the person who breached the contract to carry out whatever is remaining in the terms.
The party that did not breach the contract can ask the court to have the contract cancelled and then sue the breaching party for restitution. When the contract is cancelled it removes all parties of responsibilities and liabilities related to the contract. Restitution then puts the non-breaching party back into the position they were in prior to entering into the contract.
How an Employment Law Attorney Can Help
It’s important to note that many contract breaches can be avoided in the first place with the help of an employment law attorney. When you have an attorney review or even draft a contract for you they will be able to include the necessary language to discourage the other party from breaching the contract. An employment law attorney will also be able to review any current contracts in place to ensure that they have clauses in them that discuss breach of contract and how the issue will be handled if it ever arises.
Did a client recently breach the terms of a contract signed with your company? This can cause your business to suffer in various ways, including the inability to pay the bills due to lack of payment for services rendered. Contact the office of Thomas Paschos Law & Associates P.C. to schedule an appointment with an employment law attorney today.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.