Negotiating a contract should help businesses work cooperatively in most circumstances. Both companies clarify what they expect from each other and what they expect to receive from their arrangement. They may set clear terms for pay, project timelines and even the privacy of the parties signing the contract.
However, there can still be disputes even after businesses negotiate a signed agreement with each other. Perhaps they disagree about the implications of the verbiage included in the contract. Maybe one party encountered unforeseen issues that affected their ability to fulfill contractual obligations. There could even be a public breach of a confidentiality clause that put one party’s trade secrets at risk.
When contract disputes arise, the affected party may try to resolve the matter amicably. Sadly, the party in breach of the contract may not accept responsibility for their conduct. It may sometimes be necessary to take legal action. Civil litigation can be a powerful tool for those trying to navigate a contract dispute.
How does litigation help?
Obviously, a lawsuit can damage the relationship between the two parties. That being said, they may no longer be able to do business amicably in the future because of one party’s significant breach of the agreement.
A breach of contract lawsuit can at least help mitigate the damages incurred by the party that did not violate the agreement. Other times, the lawsuit might potentially lead to discussions and negotiations between the two parties. The risk of publicity can push one party to resolve the matter. So can the uncertainty of litigation.
The party in breach of the contract may not want to risk the variety of potential consequences a judge could impose. Judges can enforce the contract or award the plaintiff damages. They could order specific performance, including requiring that the party who violated the agreement redo work or fulfill their contractual promises.
If amicable communications don’t promptly resolve a contract dispute, initiating litigation can be a wise choice for a party negatively affected by the breach. The courts can intervene, or the possibility of a lawsuit could push the other party to remedy the situation. Reviewing the contract and discussing the best possible outcome to the situation with a skilled legal team can help those affected by contract disputes decide on the best path forward.
