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6 Steps to Take When Your Business Has Been Accused of Breach of Contract
The business world is built on contracts, and each party must know precisely what their rights and obligations are. If either party violates the terms or is suspected of doing so, it can lead to breach of contract allegations that have the potential to cost your business time and money and can result in a negative impact on your brand and reputation. These six steps can help you protect your interests and ensure you do everything possible to fight the allegations if your company has been accused of breach of contract.
1. Talk to a Business Law Attorney
When you receive notice that a breach of contract suit is being filed against your company, your first call should be to a business law attorney. You need to respond to these accusations quickly to ensure you meet any applicable court deadlines and have time to decide on a legal strategy. Trying to avoid or ignore a breach of contract claim can result in a default judgment against your business. This could open the company up to significant fines and other penalties. An attorney can help you take action to protect your business’s interests and potentially avoid a trial altogether.
2. Review the Contract and the Claim
Carefully review both the claim and your contract terms when you find out that your company has been accused of breach of contract. Sometimes, companies inadvertently violate a contract because they did not review it carefully before signing or did not double-check the details before taking action. Suppose a company generally operates on net 30 terms but signs a contract with a vendor for net 15. If the accounting department mistakenly puts the vendor on the same net 30 schedule as everyone else, it would be a breach of contract. An attorney will thoroughly review your documents when you meet and determine if the breach of contract claim is legitimate or if the company is being falsely accused.
3. Respond to the Claim
When you are served with notice of a breach of contract claim, you must respond within the time allotted by the court system. This is generally a couple of weeks and gives you time to review the claim and its veracity, but you still need to file your response quickly to avoid a default judgment. In most cases, an attorney will draft a response that denies the allegations, and depending on the circumstances, they may also file a counterclaim or a motion to dismiss if the claim lacks merit. After your response has been filed, the next step is generally to set a hearing date. However, depending on the strategy your attorney recommends, the case may be settled out of court.
4. Work With Your Attorney to Determine Your Legal Strategy
When you work with a business law attorney, you get the benefit of their years of legal experience and knowledge of the law and how it applies to business transactions and agreements. Your attorney can help you determine the right path forward when you’re faced with allegations of breach of contract. Many of these claims are handled through out-of-court settlements through mediation or other negotiations. However, your attorney will be there to represent your company and use the power of evidence and testimony to show that you adhered to all of the contract’s terms if the case does go to trial.
5. Be Realistic About What Your Company Is Facing
Breach of contract lawsuits can result from disgruntled ex-employees or soured business relationships, and you may assume that false allegations can’t do any damage. However, any time your company is being sued, it’s a serious situation that requires your attention and the help of an experienced attorney. If the plaintiff is successful in getting a judgment against your company, you could have to pay thousands in damages. You may also be ordered to pay the plaintiff’s court costs and attorney fees, and there could be injunctions against your business. For example, if a graphic design company that created your logo successfully wins a breach of contract lawsuit against you, your company could be barred from using the logo in any promotional materials. An attorney can help you understand what you are up against and what the potential consequences could be if you were to lose your case.
6. Protect Your Business’s Interests and Brand Reputation
Contrary to the popular saying, not all publicity is good publicity. Being accused of breach of contract reflects negatively on your company’s overall brand image and reputation — even if the allegations turn out to be false. It can also divert significant resources from running and growing the company to fighting the lawsuit, potentially resulting in lost business, stalled revenue, and difficulty securing future business partnerships. Working with an attorney to fight the allegations can help you protect your business’s interests, reputation, and profits during this challenging time.
Companies in Georgia rely heavily on contracts to establish business relationships, secure agreements for goods and services, and protect their interests. When your company is accused of breaching the terms of a contract, you need legal representation immediately. The Baig Firm is here to help those in Norcross and the surrounding areas fight back against these allegations. Our attorneys have the experience necessary to represent your business successfully, and we are comfortable in both negotiations and litigation so that we can advise you on all of your options. Call 678-932-1033 to find out more today.
