How to Handle a Breach of Contract Complaint

According to Wikipedia a "breach of contract is a legal concept in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance. If the party does not fulfill his contractual promise, or has given information to the other party that he will not perform his duty as mentioned in the contract or if by his action and conduct he seems to be unable to perform the contract, he is said to breach the contract" (wikipedia.org). When both parties read a sign and contract, their signatures are binging. When one person does not do as what the contract states, the breach is considered to be broken.

It could be something small such as a customer using a store credit card and not making a payment. It can be larger such as a vendor not doing business with the Whether large or small, a breach on contract can be a serious issue.

Even if the breach is something small and you ignore the issue, the problem will not go away. The customer will get the feeling that he can breach the contract again. In the long-run it may ruin the relationship between the business and the customer. Even if the breach is minor, the problem must be pointed out, so the perpetrator can make corrective actions in a reasonable amount of time. With the credit card example, the customer may have all intentions in getting the payment in. However, he is short on cash and only has enough money for a partial payment. The business owner can both accept a partial payment and get the balance the following week; or he can wait until the following week to get what is due.

Communication is necessary when handling any type of breach. The business owner must make any possible attempts to contact the vendor, whether through mail, in person or by making phone calls. It is possible the vendor is unaware of the breach. For example, he may have been expected to deliver products to the business on a specific date and thought it was at a later date. Misunderstandings are one of the major causes of contract breaches.

If communication has failed, it is possible that the customer has purposely breached the contract. If the business does not already have a corporate lawyer, one will have to be hired. When a breach has not been corrected by the perpetrator, this may have to go through litigation, especially if the offending party is not willing to resolve the problem after thirty days.

The most important thing in handling any type of breach of contract complaint, the contract must be written out and signed by both parties. If the contract is made only through a verbal agreement and a shaking of the hands, the complaint will be thrown out of court. Any documents pertaining to the contract must be visible to the judge. That way he can determine if the contract was in fact breached.

Reference:

Wikipedia.org