When one party to a contract breaches it, the other party’s immediate impulse is to file a lawsuit. But this can be an imprudent response. A breach of contract lawsuit can easily increase animosity and make it impossible to amicably resolve the matter. It also may not be necessary, efficient, or financially wise, depending on the circumstances.
Before deciding to file or even threaten a lawsuit, talk to a New York business lawyer. We can review some alternatives to litigation, such as the options discussed below.
Approach the Other Party Directly
This may sound overly simplistic, but sometimes the solution is to discuss the matter with the breaching party. There may have been a simple misunderstanding. Perhaps there is some fair and legitimate reason that the party failed to abide by its contractual obligations. The other party may be struggling financially and working hard to fix the issue, for instance.
Suing the breaching party may force them to become defensive and refuse to communicate. In other words, a lawsuit may needlessly escalate a rather simple issue that can be informally resolved. Directly approaching the party and asking why the breach happened can yield more benefits than litigation.
Informal Exchanges Between Attorneys
If the parties in question cannot or are unwilling to discuss the breach, attorneys may need to be involved. However, this doesn’t necessarily mean a lawsuit will be filed. Parties to a dispute often cannot see past their disagreements or understand the other side’s perspective. Lawyers tend to be more dispassionate and can communicate with each other differently.
As New York business lawyers, we are happy to represent clients in breach of contract actions. That representation may be as simple as communicating with the other side’s lawyer to address the issue in question.
Modify the Contract
After learning why the breach happened, it may be a good idea to modify the contract. Let’s say, for instance, that the breaching party cannot make monthly installment payments on a contract. Rather than sue the party, modifying the contract terms to make performance easier could be an option.
Before agreeing to go this route, you should speak with an experienced New York business lawyer. While it’s a good idea to be open to modification, you have to protect your organization’s best interests, too. Your lawyer can advise as to whether a modification is best for your business.
Mediation
Mediation is an out-of-court procedure in which parties discuss their disagreements and negotiate a settlement. The objective of mediation is to try to reach a mutually agreeable resolution to a dispute. Mediators oversee the process and facilitate discussions and settlement offers. But they are not empowered to decide any issues the way a judge can.
Mediation is a form of alternative dispute resolution or ADR. It is typically employed after a lawsuit has been filed to try to avoid a trial. However, parties can mediate disagreements without suing each other. There are many benefits of using medication, including:
- Saving time and money
- Devising creative solutions to complex business disputes
- Avoiding the hassle and stress of a trial
- Discussing issues in confidence
- Preserving key business relationships.
Arbitration
This is another ADR method used to resolve alleged contract breaches. Unlike mediation, with arbitration, a neutral party (the arbitrator) is in a position to decide the issues in dispute. Arbitration can be binding or non-binding upon the parties and is sometimes required before a lawsuit can be filed. Check the terms of the contract to see whether arbitration is necessary. If the arbitration is binding, there are very limited avenues to appealing an adverse decision.
There are numerous advantages to arbitration, such as:
- Privacy, since third parties are not permitted access to the arbitration.
- Streamlined schedules for discovery and other procedures.
- Saving time and money versus going to trial.
Representing Your Best Interests in New York Business Breach of Contract Matters
Whether you need help litigating or otherwise resolving a contract breach, count on Rosenbaum & Taylor. Our New York business law attorneys can also assist you with drafting and modifying business contracts. That’s the level of comprehensive business law solutions you can expect from us. Call today to learn more.
