Draw the Law: Contract Disputes, Breach Remedies

So last week, I talked about how a breach in a contract occurs. The other side either (1) failed to perform; (2) made it impossible for you to perform; or  (3) they repudiated the contract.  So now what?  You have a broken contract, what are your options?
Typically, you have a number of ways to remedy the situation with the other party before heading to court. I will briefly cover your choices in this post and cover them in-depth in separate posts.

How do I Handle this Mess?

Chances are if you are the party that did not breach, and you are waiting around for the other side to fix the problem, you are getting irritated.  You don’t want to talk to them, you want to call your attorney and tell them prepare a letter (what lawyers refer to a “nasty-gram”), which states “do what you are supposed to do or else.”  While, this definitely one-way to talk the opposing side, it probably is not the best.  However, it is a method, negotiate/communicate.

You got into this contract probably out of some form of communication and you definitely can fix it by talking it out.

But, I don’t Want to Talk to Them or I Don’t Think They Will Respond

Sometimes communications have broken down completely, they don’t return your call or they ignore your Facebook messages (yeah, it sounds like a messy break-up).  You can take action on your own.

One method is that if you are the one that has to pay you could unilaterally stop payment. However, be warned that going down this path means you could be in breach of the contract as well.  Sometimes to preserve your rights under the contract you may still have perform. It depends, and sometimes legal advice should be sought.

Get a Third-Party to Decide

Alternative dispute resolution (ADR) is where you and the other party go through mediation or arbitration to resolve the matter.  Mediation and arbitration slightly differ in their approach and depends if they are appropriate to the dispute.  Couple things to note: (1) sometimes you put a clause in the contract in the case of a breach that you choose one or both; (2) because it requires agreement, if not in the contract, you cannot force the other side to ADR; and (3) ADR is not under a formal court system (but may produce a new agreement enforceable in court).

The Last Stop, I’ll See You in Court

Finally, there is the option you all already know and may consider (as you reading this post on a legal blog), law suit.  This should be the option of last resort.  You don’t need me to tell you that suing for damages or other remedies is costly, time-consuming, and an energy drain.   With this option, you definitely will want to seek legal advice on how to handle bringing your dispute into the court system.  However, consider the other three remedies as places to at least consult with an attorney to insure that this last option is preserved.  You do not want mistakenly lose the right to suit due to an action like self-help.

So I will see you next week where I will discuss remedy one, communicating with the breaching side to see if they are willing to fix the problem.

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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