Many companies conduct business-to-business (B2B) operations. Instead of marketing products to consumers or providing services to individuals, they manufacture products that companies use or provide services for other organizations.
B2B operations can be predictable and profitable in many cases. Other companies may be more reliable clients than members of the general public. They may also be more pragmatic about transactions. Frequently, contracts play a crucial role in B2B transactions.
Contracts can lock in prices, clarify the terms of an agreement and help organizations schedule production runs or service calls. Unfortunately, the other business that signs a contract may not fulfill their obligations under the agreement. A breach of a B2B contract may lead to litigation.
What typically happens when those cases go to court?
Validating the contract
One of the first steps in a breach of contract lawsuit scenario is to prove that the contract is valid and enforceable. Judicial review can help validate the claim that there is a contract between the two parties.
Proving a breach occurred
With potential exceptions for lawsuits brought due to anticipatory breaches, plaintiffs typically need clear evidence that a violation of the contract already occurred. Financial records, photographs of a half-finished project or samples of products or materials that don’t reach contractual standards are all potential evidence of a breach of contract. Organizations may also need evidence outlining how the breach impacted the business. The right evidence can help prove that one party’s violation of a B2B agreement has affected the other company.
Requesting a specific remedy
Typically, plaintiffs pursuing a breach of contract lawsuit ask the courts for a particular solution based on the circumstances. They may ask the courts to enforce the initial agreement by issuing an order of specific performance. They might ask for damages because the breach of contract caused significant financial setbacks for the organization. They could even ask for the courts to release them from the contract so that they don’t have any future obligations to the other party. All of those solutions can be useful depending on the situation.
Taking a breach of contract issue to court is often the only remedy available if the other party isn’t eager to correct the issue at hand. Business owners and executives should be ready to assert themselves in scenarios where another company doesn’t follow through with contractual promises and much is at stake.