Business contracts help to establish clear arrangements for continuous organizational operations. Contracts ensure the timely delivery of raw materials or the availability of staffing through an agency. They can prevent certain kinds of misconduct, like the misuse of trade secrets.
A contract is a written record of a business agreement between two parties that makes the agreement easy to clarify and more easily enforceable. Despite having a written record of the agreement reached, one party might fail to follow through on its promises to the other. Breach of contract scenarios can cause operational disruptions and financial setbacks for a business. In some cases, filing a breach of contract lawsuit can be an appropriate solution to a contract issue that has affected a company negatively.
How can the civil courts help?
A civil court judge can review and potentially resolve a dispute related to business contracts. In some breach of contract lawsuit cases, a judge might review a contract and determine that it is not valid and enforceable. That could lead to an elimination of the obligations that each party has to the other.
Other times, when the contract holds up under scrutiny, a judge might take action to enforce it or penalize one party for a breach. A judge could order specific performance, which is a way of compelling one party to perform certain tasks. They could even order one party to redo work that didn’t meet contractual standards. A judge also has the authority to award damages to the plaintiff in a contract lawsuit. If there are clear economic damages associated with the breach of the contract, a judge can grant financial compensation to the plaintiff to offset that economic harm.
Many contract lawsuits settle outside of court
Those embroiled in a business dispute may not relish the idea of litigating, but that isn’t necessarily the outcome of filing a breach of contract lawsuit. Quite a large percentage of civil lawsuits actually settle outside of court. The act of filing the lawsuit might motivate the other party to address the contract reach. It might also give them an incentive to sit down for mediation or negotiations to resolve the conflict.
Filing a breach of contract lawsuit can be a smart move when less formal communications have not resolved contract issues. Business owners and executives who understand how the courts may help are in an ideal position to effectively uphold and enforce their contracts.