Once a business has committed to specific arrangements in writing, there is an expectation that all parties should follow through with that agreement. A written contract is a record of a business arrangement that helps make that deal enforceable.
Unfortunately, even with a clear written contract, it is still possible for one party to default on their contractual obligations. A breach of contracts might involve failing to make a delivery by a scheduled date, leaving a project incomplete or doing work that does not meet contractual standards. The party negatively affected by the contract breach might want to pursue a breach of contract lawsuit.
How might the civil courts handle contract-related litigation?
By reviewing the contract
The first stage in any breach of contract lawsuit is often a review and analysis of the contract. Sometimes, one party alleges that a breach occurred while the other insists that they technically met the obligations outlined in the contract. Establishing that a breach actually occurred is a key element of a breach of contract lawsuit. Verifying that the contract itself is actually valid and enforceable is also important. Judges may determine that the contract was unconscionable and therefore unenforceable or that it included illegal provisions.
By determining the impact of the breach
Plaintiffs initiating breach of contract lawsuits frequently present evidence to the courts of how the failings of the other party affected the business. Documentation of production delays or proof of penalty clauses in outside contracts affected by the breach could lead to one party seeking damages from the other.
Judges have the authority to award financial compensation when contract violations have economic consequences. Other times, judges can agree to terminate a contract so that the plaintiff no longer has an obligation to make payments to or do business with the defendant.
Finally, judges might order specific performance. They can either require that one party fulfill unperformed contractual obligations, deliver goods or redo substandard work. An order of specific performance carries the full weight of the civil courts and could lead to penalties if the defendant does not fulfill the order.
Oftentimes, breach of contract lawsuits never see their day in court. Deciding to litigate a contract-related business issue may prompt a breaching party to address the issue or at least motivate them to agree to attempt to collaboratively address the issue. Ultimately, those who know what occurs during a breach of contract lawsuit can prepare the best response possible to a violation of a written business agreement.