What should you do in a supplier breach of contract scenario where they fail to supply contracted goods or services?  What type of breach has occurred?  What steps should you consider in order to protect your interests?

There are Several Types of Breach of Contract in California

A minor breach or partial breach occurs when one of the parties failed to perform on some portion of the agreement but the essential “benefit of the bargain” in terms of a product and/or service was ultimately fulfilled.  An example of this might be completing the contract after the agreed upon due date, or the inability to deliver on a minor detail of the agreement.  The non-breaching party is still able to recover damages for the portion of the contract which was unfulfilled or for delays based upon the terms of the agreement itself.

An anticipatory breach occurs when one of the parties notifies the other that they will be unable to fulfill the terms of the contract prior to the due date for performance on the contract.

A material breach occurs when one of the parties to a contract will not be able to fulfill their obligations under the contract under any circumstances, in effect rendering the agreement to be useless.

In a supplier breach of contract scenario it is important to seek immediate counsel from the experienced breach of contract and business attorneys at the Watkins Firm as soon as you learn of any anticipatory or actual breach of contract.  We will discuss the situation, associated damages and your goals and objectives based upon what has happened.

The General Steps to Take to Protect Your Company’s Interests

There are several steps you should take to protect your company’s interests.  The first step we take when advising our clients in these situations is to establish clear goals regarding the desired outcome.  Is this an important vendor who has simply missed a deadline, or is the performance on this contract critical to the success of your business?  Is it important to preserve the underlying business relationship?  Are you willing to provide more time or a slight increase or decrease in cost in order to complete the transaction?

At this point many clients are a bit caught off guard.  “Why should we consider agreeing to a price increase, we aren’t the ones who breached the contract?”  One must consider the time frame involved in business litigation, as well as the expense and interruption of business that may result.  There are other more expedient and less expensive options to resolve the situation and maximize profitability for our clients.

We must also consider your own obligation to take prompt, reasonable and prudent action to mitigate damages which might result from the supplier breach of contract.  The failure to mitigate damages can limit or eliminate your ability to recover damages down the road.

Strategies to Resolve a Supplier Breach of Contract Dispute

There are many strategies to resolve a supplier breach of contract  dispute.

Your Watkins Firm attorney works to develop a strong, detailed chronology of events as well as a mastery of associated damages.  These tools inform a well-crafted demand letter to put opposing parties (and their counsel) on notice that we are prepared to file a lawsuit. This is the leverage required to negotiate a settlement which reflects your goals and objectives for the situation at hand.  The Watkins Firm is able to resolve the majority of our breach of contract cases through effective, leveraged negotiations.  This is the fastest and least expensive strategy to resolve the case and move forward.

We represent our clients in settlement conferences, business mediation and arbitration.  Mediation is a private, confidential environment that keeps your business and financial information out of the public record while resolving a breach of contract dispute.  The mediator works with the parties to help resolve most or all of the issues on the table, resulting in a settlement agreement.

If the mediation is not able to resolve every issue associated with the supplier breach of contract dispute the next step is usually binding arbitration.  Arbitration is like a very fast trial without all the superfluous motions and other delay tactics of trial.  The arbitrator has the authority to establish the process (usually completed over a matter of days), marshal the evidence and collect testimony and ultimately render an “award” or “finding.”  The decision of the arbitrator is final and cannot be appealed in the vast majority of cases.

This is why it is important to work with the Watkins Firm.  We have more than 40 years of proven, successful experience in breach of contract dispute resolution.  Our clients value our experience, personal style and legal skill in these matters, and the common sense approach we bring to resolving them.  We work with our clients to establish clear goals, protect their financial and business interests and to resolve the breach as quickly and cost-effectively as possible.

If you are concerned about a vendor or supplier breach of contract we invite you to review our Podcast Episode 5 – Breach of Contract as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.