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Do you need to take legal action over a breach of contract?

Dealing with any type of business dispute can cause headaches and other problems within a company. The responsibility of handling such issues may fall to you, and you undoubtedly do not want to make any mistakes when it comes to protecting the company from unfavorable outcomes.

One major issue that can affect businesses is breach of contract. Though contracts can act as safeguards for deals and business relationships, the parties involved do not always stick to the agreements. As a result, you could find yourself in a tough spot because the other party violated the terms of the contract.

When does a breach occur?

A breach of contract can take place in multiple ways and in varying levels of severity. For example, you may want to determine which of the following types of breach you believe occurred:

  • Material breach: This violation is the most serious, and the other party's violation was significant enough that your company no longer had to uphold its part of the contract. 
  • Partial breach: This breach is less severe than a material breach, and your company will likely still have to uphold its portion of the contract.
  • Anticipatory breach: With this type of breach, you suspect that the other party will breach the contract because of actions on his or her part that indicate the intention not to uphold the agreement.

You could take legal action for such breaches, but you may want to keep in mind that it can be immensely difficult to prove an anticipatory breach in court because an actual breach has not yet occurred.

When can you take action?

If you feel that legal action suits the situation, you will need to meet various requirements. After all, the burden of proof will fall to you when it comes to providing evidence for your claims. The requirements you need to meet include the following:

  • You had a valid, legally-binding contract.
  • You must show that the other party breached the terms of the agreement.
  • You must have fulfilled your end of the contract.
  • You must have notified the other party of the breach prior to filing a lawsuit.

If you believe your case meets these requirements, you may have reason to move forward with a lawsuit. Certainly, having to take such action is difficult, but in order to protect the best interests of your company, taking the matter to court may be wise.

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