When a business partner breaches their partnership or joint venture agreement with you, it can feel like a betrayal. You may feel the urge to take immediate action against them, but letting emotions take over could put the business at risk.

California business owners facing a breach of contract dispute must make sure they understand the next steps they must take to hold the other party responsible while still protecting their business.

WHAT SHOULD BUSINESS OWNERS DO AFTER A BREACH OF CONTRACT?

In cases of a breach of contract, it is often beneficial for business owners to consult an experienced business litigator to protect their interests and business. However, the next steps business owners should take include:

  1. Reviewing the contract: It is critical to carefully review the contract for a few reasons. It helps business owners understand all of the elements of the contract the business partner breached. It is also necessary to review the dispute-resolution clause they established, so they can understand the actions they can take, as well as the statute of limitations, to recover the losses.
  2. Gathering additional evidence: Did the business partner fail to complete their responsibilities? Or did they fail to provide the service or product agreed upon in the contract? It is helpful to collect and organize evidence of the breach of contract. Collecting this evidence often helps calculate the losses they suffered.
  3. Discussing the conflict with the other party: In most cases, business owners wish to avoid time-consuming lawsuits that draw their focus away from the business but also put their business at risk. It is beneficial to discuss the breach with the party to determine if there is a way to remedy the situation.

Unfortunately, there are cases where the other party does not wish to negotiate or rectify the situation. They might also refuse to pay for any of the damages resulting from the breach of contract, claiming they did nothing wrong.

In these cases, business owners may have to file a lawsuit to recover the damages they deserve for this breach.