When the other party in a contract with your business defaults, their failure can hurt your company. Maybe they don’t provide the services you need to keep your business running. Maybe you run out of crucial supplies and cannot provide ordered products for customers.
A contract dispute with another business can affect your company’s operations and even its reputation. It may seem like going to court would be a pointless endeavor, as the other party so far has not made any effort to resolve the issue. However, going to court can compel them to remedy their prior breach of contract.
The threat of court can lead to a settlement
Often, just filing a lawsuit against another business is enough to lead to a resolution of the underlying conflict. The vast majority of contract disputes that result in filing a lawsuit will settle outside of court.
If the other party is uncooperative even after you serve them with paperwork, then the judge will help resolve the matter after reviewing your contract and business records.
Judges have the authority to resolve the dispute
The judge can invalidate the contract, ensuring that you no longer have any obligations to the other party. They could order the refund of any money you have already paid for goods or services not received. In fact, a judge can even award you damages if you can show that the other party hurt your company financially.
Finally, a judge has the power to order specific performance. They can enter an order requiring that the other party perform the service you initially requested or provide the supplies as contracted. While they may not follow the original agreement, they may at least respect the authority of a court order.
Every contract dispute is a learning opportunity
If you spend weeks trying to resolve a contract dispute, you may need to review how you structure your contracts. Revisiting your contracts so that they offer more protection to your company can be a smart move after you get burned by a supplier or client who doesn’t follow through with their contract.
Many businesses benefit from having unique contracts drawn up for each of their major transactions, rather than simply using boilerplate documents. Reviewing existing contracts or litigating your contract dispute will reduce the impact another company’s failure has on your business’s operations and overall success.