Every business, from time to time, must deal with breaches of contract. The experience can be disruptive and perhaps even trigger feelings of resentment toward the breaching party. While the non-breaching party’s immediate response may be to threaten a lawsuit, is the breach really worth suing over? Before you head to court, there are some factors to consider. The New York contract law attorneys of Rosenbaum & Taylor can discuss these with you.
The consequences of a breach
Not all contract breaches are created the same. Some may be relatively minor and inconsequential, like being slightly late with a promised delivery. Others, however, can be devastating to your business. For instance, you may have only one parts supplier for a good your company produces. If that supplier fails to deliver, you can’t make the product. Breaches can certainly result in financial harm to a business.
You will have to weigh the severity of these consequences in determining whether to pursue a lawsuit. Take the above example of a breaching parts supplier. You may be able to find another supplier, quickly and in time to produce your goods. But this certainly isn’t a guarantee. And depending on how long it takes to get production back on track, you could lose significant money.
Your contract law attorney will discuss the breach and how easy it is to work around it. In deciding whether to file a lawsuit, your attorney can also help you evaluate a few other factors.
To sue or not to sue
Besides the nature of the breach, these are a few things to bear in mind before litigating:
- Was there really a breach, as defined by law?
- Was the breach material – that is, did it defeat the purpose of the deal itself?
- How strong is your case, and how well can you prove it?
- What kinds of damages may you be able to pursue?
- How much in damages can you demand?
- Will the damages be worth what you pay in legal and court fees?
- Can the breaching party actually pay a judgment if you win?
- The basics of New York contract breaches
To answer the first – and most important – question, the following must be proven in a breach of contract case:
- There was a valid and binding contract between the parties
- The non-breaching party performed its obligations under the contract
- The breaching party failed to perform its contractual obligations
- Said non-performance caused the non-breaching party to incur damages
You should never treat any of these elements as given. You will need to prove each one, and make sure you have sufficient evidence. Some parties skip over the first element and just assume the other party will agree there was a contract. But the breaching party may deny there was a valid contract at all.
Your attorney will work to prove each element. Then, your lawyer will help you weigh the above factors. If a lawsuit is desirable, your attorney will file and serve the appropriate paperwork. Where possible, the case will be settled out of court. But your contract lawyer should be prepared to try the case in court if necessary.
Serving Your New York Contract Needs
Do you have questions about a party that has breached its contract with you? Do you want to decide whether it’s a good idea to file a lawsuit? Let Rosenbaum & Taylor advise you and your business today.