When two parties enter into a contract, both expect the other to fulfill their end of the agreement. Unfortunately, sometimes things don’t go as planned, and one party may breach (or break) the contract. If you find yourself in a situation where the other party isn’t holding up their end of the bargain, you might be wondering how to enforce the contract and get what you’re owed. In this blog post, we’ll explain the steps you can take to enforce a contract after a breach, using plain language that’s easy to understand—even if you’ve never dealt with a legal issue before.
What is a Contract Breach?
A contract breach happens when one party fails to perform their obligations as outlined in the agreement. There are different types of breaches:
- Minor Breach (Partial Breach): A minor breach occurs when one party fulfills most of their obligations, but doesn’t complete everything as promised. This breach might not entirely ruin the contract, but it can still lead to damages.
- Material Breach: A material breach is more serious. It occurs when one party fails to perform a significant part of the contract, essentially undermining the purpose of the agreement. This type of breach often leads to the non-breaching party seeking legal remedies.
- Anticipatory Breach: This occurs when one party indicates that they won’t fulfill their contractual obligations in the future. Even if they haven’t officially breached the contract yet, their actions show that they won’t be able to perform, allowing the other party to seek legal action.
Steps to Enforce a Contract After a Breach
If the other party breaches the contract, there are several steps you can take to enforce it. While not every contract dispute leads to a courtroom, understanding your options can help you navigate the process and, if necessary, pursue legal action.
Step 1: Review the Contract
The first thing you should do if you believe a breach has occurred is to carefully review the contract itself. Contracts typically include specific terms related to performance, deadlines, and consequences for failing to meet obligations. Look for clauses related to breach, remedies, and dispute resolution.
Some contracts include provisions for what happens in case of a breach, such as giving the other party a specific amount of time to fix the issue (called a “cure period”) before further action can be taken.
If the contract includes a clause about arbitration or mediation, you may be required to go through those alternative dispute resolution methods before going to court.
Step 2: Communicate With the Other Party
Once you’ve reviewed the contract, the next step is to try to resolve the issue directly with the other party. Often, breaches occur due to misunderstandings or circumstances beyond someone’s control. It’s possible that a simple conversation can clear things up and lead to a resolution without involving lawyers or the courts.
Send a formal letter or email to the breaching party, outlining the breach, referring to the contract’s terms, and requesting that they fulfill their obligations. This is sometimes called a “demand letter.” Be professional and clear in your communication. You might be surprised how often an issue can be resolved by simply opening up a dialogue.
Step 3: Offer an Opportunity to Cure the Breach
Depending on the nature of the breach and the contract terms, you might offer the breaching party an opportunity to “cure” the breach. In other words, give them a chance to fix the issue within a reasonable timeframe. This is especially important if the breach is minor and there’s still an opportunity to salvage the contract.
For example, if you hired a contractor to renovate your kitchen and they missed a few key deadlines, you could provide them with a written notice that they need to complete the work by a new deadline before taking further action.
Step 4: Seek Mediation or Arbitration (If Applicable)
Many contracts include a mediation or arbitration clause, which means you’re required to attempt resolving disputes through these methods before going to court.
- Mediation: In mediation, a neutral third party helps both sides communicate and negotiate a settlement. It’s a non-binding process, meaning the mediator can’t force either side to agree, but it can lead to a resolution.
- Arbitration: In arbitration, a neutral arbitrator hears both sides of the dispute and makes a binding decision. Arbitration is typically faster and less formal than going to court, but it can still result in a legal ruling.
If your contract includes one of these clauses, you’ll likely need to go through this process before filing a lawsuit.
Step 5: File a Lawsuit
If the other party refuses to resolve the breach and your attempts at negotiation or mediation fail, your next option is to file a lawsuit. This is often a last resort because legal battles can be time-consuming and expensive, but sometimes it’s necessary to enforce a contract and recover damages.
When filing a lawsuit, you’ll need to prove the following elements in court:
- A Valid Contract Exists: You’ll need to show that a legally binding contract was in place. This includes proving that both parties agreed to the terms and that the contract followed the necessary legal requirements.
- The Other Party Breached the Contract: You’ll need to demonstrate that the other party failed to fulfill their obligations as outlined in the contract.
- You Suffered Damages: You must show that you suffered a loss or damages as a result of the breach. This could include financial losses, delays, or the cost of finding another contractor or service provider.
Once these elements are proven, the court may order remedies, such as:
- Compensatory Damages: This is the most common remedy, where the breaching party must pay an amount that covers the losses caused by the breach.
- Specific Performance: In some cases, the court may order the breaching party to fulfill their obligations as specified in the contract.
- Cancellation and Restitution: The court may allow you to cancel the contract and seek restitution, meaning you’re reimbursed for any losses or expenses related to the contract.
Final Thoughts
Enforcing a contract when the other party breaches it can be frustrating, but understanding your rights and options can help you navigate the process. Start by reviewing the contract and communicating with the other party to resolve the issue. If that doesn’t work, you may need to explore alternative dispute resolution options or file a lawsuit to enforce the contract and recover damages.
While handling a contract breach can be a challenge, it’s important to act quickly and follow the steps outlined in your agreement. You may also want to consult with a legal professional to ensure you’re on the right track and taking the proper actions to enforce the contract effectively.
