In a perfect world you enter into agreements, and everyone receives a benefit, both are happy with the outcome, and there are no disputes. However, on occasion agreements and contracts do not go as planned. Whether the contract is verbal or written the terms of a contract may not be fulfilled for some reason, or the contract may be misinterpreted by someone. When this happens, there is a breach of contract. For example, if you enter into an agreement to purchase a product for a price, but the product is never shipped, or shipped late, and your business does not receive its inventory in time the contract may have been breached by the selling party. Or in another circumstance you enter into an agreement to repair equipment, but the repair person is late to the repair appointment, or does not repair the equipment appropriately. As a business owner you may be asking yourself, should you still pay the full price for a late delivery, or failure to fix your equipment timely. Or maybe your production or sales were hurt due to the delay or failure to ship your order or repair your equipment.
When something goes awry with a contract or agreement, and a party fails to fulfill his or her end of the contract, a “breach” of contract occurs. In breach of contract situations, the first step is to determine that a breach occurred and who caused the breach. The second step is to determine the appropriate “remedy.” A remedy seeks to make the non-breaching party whole again. Usually the remedy is monetary in nature, but on occasion the remedy is specific performance (making the breaching party perform per the agreement). When the remedy to a breach of contract is monetary, the next step is to determine what financial damage was caused due to the nonperformance of the contract, in whole or in part.
If you find yourself in a contract dispute, or your business has been damaged due to another’s failure to properly perform a contract or agreement, at Schmeltzer & Bostic, we can assist you in determining your rights under the contract, a proper remedy, and whether to negotiate a settlement or seek court intervention.