Discovering that a client, vendor, partner or other party has not followed your agreement can leave you wondering what to do next. You may feel pressure to demand payment or threaten legal action right away, but a quick reaction could overlook important terms or evidence. Taking a measured approach can help you protect your interests while you assess the problem.
Here are the steps to take after discovering a potential breach.
Review the contract
Start by reviewing the agreement to confirm what the other party promised to do and what the contract requires if they fail to perform. Check the relevant deadlines, payment terms, termination provisions and dispute-resolution procedures.
Pay close attention to any requirements for notice, an opportunity to fix the problem or mediation or arbitration before you file a lawsuit. These terms can affect what you should do next.
Preserve the evidence
Keep records that show what you expected, what happened and when it happened. Depending on the dispute, that may include:
- The signed agreement and amendments
- Emails, texts and other communications
- Invoices, payment records and performance records
- Photos, reports or other records showing the problem
Avoid deleting or altering relevant communications, even if they seem unfavorable. Those records could help establish what each side agreed to and how the dispute developed.
Document the business impact
Record the losses or disruptions caused by the breach while the details remain fresh. For example, you may need to track unpaid amounts, additional expenses, project delays or lost business.
Keep supporting records for each claimed loss. A clear record can help you and your attorney evaluate the potential value of the dispute and determine whether pursuing the claim makes financial sense.
Follow the contract’s notice requirements
Follow any notice or cure requirements before taking further action. Your agreement may specify how you must notify the other party and give them a certain amount of time to correct the problem.
Florida law generally gives you five years to bring an action based on a written contract, but exceptions can apply. You should not treat that deadline as a reason to delay taking action because the contract itself may impose additional requirements.
Consider your resolution options
Your next step could involve a demand, negotiation, mediation, arbitration or litigation, depending on the contract and circumstances. Not every breach requires a lawsuit, and a negotiated resolution may save time and expense when both sides have room to reach an agreement. Florida contract disputes can also proceed through mediation or demand efforts before litigation when those approaches make sense.
Take a careful approach to the dispute
Contract disputes can become complicated quickly, so taking the time to review the details carefully can help protect your business and its interests. Your attorney can also help you review the contract and circumstances surrounding the dispute before you send a demand or take legal action. This can help identify any notice requirements, potential remedies and other issues that could affect your position.
