Torn contractThis is the next post in a series of articles discussing drafting, reviewing and negotiating contracts in Olympia and Tacoma, Washington. The previous post highlighted the importance of engaging experienced counsel in preparing contractual documents for your business. Contracts can be significant financial or operational commitments.  Retaining a knowledgeable contract attorney can protect your business from risks, minimizing foreseen risks and revealing unforeseen risks. Unfortunately, even the most well-written contract cannot prevent disputes and breaches of contract. This post will focus on what to do when a breach of contract occurs. If you need assistance with a contractual matter, contact our office today to speak with an attorney.

A breach of contract occurs when one party fails to do as promised. As discussed previously in this series, a written contract should clearly outline the parties’ respective obligations. It may also set forth specific events of default and how the parties should proceed if a default or breach occurs. If your business believes that another party is in breach of contract, you should first refer to the written agreement to see what recourse is available. In some circumstances, contracts will include “cure provisions” or language that allows a breaching party to rectify or mitigate the breach in a certain period of time. It is not uncommon for a contract to require the non-breaching party to provide written notice to the breaching party before other actions can be taken. Further, not all breaches are the same – and just because one party has breached, it does not mean that the other party can necessarily cease to perform. Following the specific provisions of the contract is imperative to preserving the non-breaching party’s rights going forward.

A written contract may also provide a roadmap for resolving breach of contract claims. For example, while the remedy for a breach of contract is usually an award of damages in a money judgment, the contract may include a specific performance clause or a similar clause allowing the other party to go to court to get a court order that the breaching party do, or cease doing, something. In other cases, a contract may include a liquidated damages clause, in which the parties agree in advance that damages will be difficult to calculate and therefore agree to an estimated damages amount that can be awarded without the need for such specific calculation. A contract may require the parties engage in alternative dispute resolution (arbitration or mediation) to resolve a breach of contract claim. In such cases, traditional litigation of a breach of contract may not be available to the parties unless and until the parties engage in mediation or arbitration of the dispute, or at all. In the absence of such provisions, a non-breaching party may elect to file a complaint for breach of contract in court. Provisions in a written agreement may impact court filings by requiring action to be taken in certain venues or jurisdictions.

In the unfortunate event that a business is harmed by a breach of contract, a well drafted agreement can provide guidance on how to address the situation. Questions about potential legal recourse should be directed to a knowledgeable contracts attorney. If you need assistance, contact our office today to speak with an Olympia contract lawyer. The firm also services the Thurston County cities of Lacey, Tumwater, and Yelm, the Pierce County cities of Tacoma, Puyallup, and Lakewood, the Lewis County cities of Centralia, and Chehalis, the King County cities of Seattle, Auburn, Bellevue, Burien, and Federal Way, as well as other areas in Washington, including Grays Harbor, Mason, Cowlitz, and Pacific Counties.