Whether you have knowingly or accidentally breached a contract, it is important to take immediate action. Failing to do so could result in serious legal consequences and expensive fines.
As contract dispute attorneys, we’ve compiled the first steps you need to take when you realize there’s been a breach of contract.
How to Know If You’re Dealing with a Breach of Contract
The first step in dealing with a contract breach is determining if one exists. This can be difficult to do without the help of an experienced contract attorney, but there are several tell-tale signs you should look for:
- Has there been any form of non-performance?
- Has either party failed to uphold their obligations under the agreement?
- Has either party failed to provide accurate information in connection with the contract?
- Did one of the parties fail to abide by a certain timeline or other deadlines stated in the contract?
If you answered ‘yes’ to any of these questions, it’s likely you’re dealing with a breach of contract and should take action.
Steps to Take After a Breach of Contract Has Been Identified
Once you’ve determined that a breach of contract has taken place, it’s time to take the following steps:
The first order of business is to collect evidence that proves or disproves the breach. This involves gathering copies of emails, contracts, letters, and other relevant documents. If there have been any verbal agreements related to the contract in question, you should also take note of them and write down your version of the facts as you know them related thereto. If telephone conversations are being had, remember to start taking notes about each one, e.g., what date, time, who with, and what was discussed.
Talk to the Other Party
After you’ve collected the necessary evidence, it’s important to communicate with the other party involved. This will give them a chance to explain their side of the story and hopefully come to an amicable resolution without legal action.
Know Your Statute of Limitations
Do a little research to find out the statute of limitations for filing a breach-of-contract lawsuit in your jurisdiction. This is a law that sets limits on how long after an injury or wrong has occurred, such as a contract breach, can you sue for damages.
Depending on the state and type of contract, the time frame for filing a lawsuit could be anywhere from one to six years. In California, the statute of limitation for a breach of a written contract is four years from the date the contract was broken and two years for a breach of an oral contract.
Knowing this timeframe is important, as it will help you determine if it’s worth pursuing legal action or not. Your best source of information for the statute of limitations will be a contract lawyer.
Find Out What Damages Are Involved
The next step is to determine what damages, if any, were incurred due to the breach. This could be anything from lost profits to physical property damage. It’s also important to consider any indirect costs that may have been caused by the breach.
Also, determine if your contract has an attorneys’ fees provision contained within it. Legal fees and costs can also be a measure of damages that you may recover, in addition to legal interest on an amount certain.
Once you know the damage amount that would have to be paid out if you prevailed in your breach of contract action because of the breach, it will be easier to determine if pursuing a lawsuit is worth it.
Attempt Alternative Dispute Resolution (ADR)
Rather than engaging in a long, drawn-out court battle, consider opting for alternative dispute resolution (ADR). ADR is a less formal and less expensive way to resolve disputes outside of the courtroom. It includes mediation and arbitration, both of which are facilitated by an impartial third party.
By using ADR for contract disputes, the parties involved can reach a resolution quickly and cost-effectively. It is often more beneficial for both parties, as it allows them to maintain control over the outcome of the dispute.
Hire a Contract Dispute Attorney
If the breach of contract is too severe or complicated to solve through ADR, a contract dispute attorney can help you. Experienced contract lawyers can help you understand your rights and legally protect you if legal action becomes necessary.
An attorney can also explain any potential remedies available and provide advice on how best to proceed with the case. Whether that means filing a lawsuit or negotiating a settlement, your attorney will be able to give you sound legal advice and help you get the best outcome possible based on your priorities.
Get Expert Help From The Mellor Law
Whether you need an advisor or someone to help you through to winning a case, the Mellor Law can help. With years of experience in contract law, we understand the ins and outs of even the most complex breach-of-contract cases.
Schedule a call with our team to find out how we can help you best solve your breach of contract.