Dealing with Breach of Contract
The days of the “handshake deal” where people conducted business relying solely on the honor and reputation of the other party are long gone. Every day, businesses engage in activity that involves contractual obligations, even if they have not specifically negotiated a written agreement with another party. The contract is the engine that drives commerce by providing legally enforceable rights to the parties who enter into an agreement. It is no surprise that extensive study of contract principles is one of the foundation stones of the legal education. A Hoffman Estates and Des Plaines lawyer can help your business protect its interests in the event that another party has breached a contract.
A well-drafted contract is a written commemoration of the agreement between the parties, outlining the responsibilities and expectations they have for each other. They can also explicitly constrain the behavior of the individuals. Some of the more common types of business contract s include:
- Commercial leases and real estate agreements
- Sales contracts with customers or suppliers
- Licensing agreements
- Employment or independent contractor agreements
- Business sales and mergers agreements
- Franchise agreements
- Partnership agreements
Acting against the agreement or failing to perform your side of the contract is a breach of contract and can have serious legal consequences. However, not every breach of contract is serious enough to warrant considering litigation. The first step to dealing with a breach of contract is to evaluate the situation and determine if the breach was material, and whether it caused actual damages.
A breach is material if it deprives the wronged party of a benefit they reasonably expected. Most courts will consider the extent to which the injured party can be adequately compensated, the extent to which the party failing to perform will suffer forfeiture, the likelihood that the party failing to perform will cure the failure, and the extent to which the behavior of the party failing to perform comports with standards of “good faith and fair dealing.”
Although the court can order the breaching party to live up to their end of the contract, such “specific performance” is rare and the usual result of victory in a breach of contract litigation is the award of money damages. The goal is to make the wronged party whole, and the loser usually ends up paying for sales or other lost business that came about because of their breach of the contract.
Because contractual language is often ambiguous, these determinations are not always easy to make. If you have been damaged by a breach of contract, you should contact a Hoffman Estates and Des Planes attorney to evaluate the claim before heading to court.