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3 ways to resolve a contract issue with another business

If a transaction is important to your business, putting the terms in writing was probably one of the first things you did. Transactional contracts create accountability for both parties and reduce the likelihood of conflict.

When there is a written document to refer to, the possibility of a significant disagreement about the contract is lower. Additionally, having everything in writing will make it easier for you to enforce the contract to protect your business.

Once another party defaults on their contractual obligations to your company, you may need to take steps to protect your business and resolve the breach of contract. 

Communicate with the other party

Perhaps there was a rash of resignations at a service provider or supplier, so they have fallen behind on their delivery schedule. They may not have had the staff on hand to notify you of the issue. Perhaps it is a small operation, and the owner who does most of the work recently fell ill and is in the hospital.

Instead of assuming that someone who failed to fulfill their contract obligations acted in bad faith, reaching out to address the matter with them is a better approach. It could lead to a quick resolution or at least a timeline for when you can expect the other party to follow through on their obligations. 

Consider alternative dispute resolution

Turning to alternative dispute resolution services, like arbitration or mediation, can be a way for two companies to work through a contract issue and settle the matter without going to court for causing lasting damage to their working relationship.

Mediation can be particularly beneficial if you will continue to work with the other party. You may find it easier to compromise when partnering with an outside professional, and both companies can reduce the financial costs and possible reputation damage associated with litigation.

Know when to turn to the courts

If the other party simply won’t work with you or refuses to follow through on their obligations despite signing a contract and possibly receiving partial payment already, you may have no choice but to go to court.

Although most business disputes do settle outside of court, you can rely on a judge in the civil courts to review and hopefully resolve a significant breach of contract issue. They could order the other party to follow through with the contract or even award you damages.

Focusing on your company’s long-term success can help you better navigate a current breach of contract issue.


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