12 Feb How To Respond To An Employee’s Breach of Contract
When an employee repeatedly refuses to comply with specific job requirements or a supplier consistently fails to deliver the correct materials — this breach of contract often negatively hinders your business operations, wasting both time and money.
Dealing with the issue immediately blocks future breaches and may reward you for damages committed by the other party. Knowing how to correctly respond to and take action against a breach of contract before it hurts your business makes all the difference. Simply understanding what type of breach was committed fulfills the first step in the response.
There are four different types of breaches:
- Anticipatory breach: This type of breach prepares for when you reasonably expect the contract to be breached. For instance, if the project needs to be done on a certain date, but the other party slacked off, destroying the possibility of completing it on time.
- Fundamental breach: This breach allows one party to legally deviate from the contract and sue for damages when the other party fails to fulfill their duty. These breaches mostly result in court.
- Minor breach: With this partial breach, you sue for the actual damages done and not for the entire project.
- Material breach: Considered the most serious, this breach allows you to recover more damages than you would with a minor breach. Material breaches focus on a party’s failure to complete their assigned duty.
After identifying which type of breach the other party committed, you need to provide facts to build credibility for the case. Keep track and try to provide proof that the contract existed and was then broken, you lost money or something of value as a result and that the responsibility rested on the other party.
Now that you have your evidence and claim, decide what you are going to do. Settling the case out of court saves time and money, but often the other party refuses to comply. If small enough with if the dispute occurring in the same area, attempt to settle the dispute in a small claims court. If large enough or if both parties worked in other areas, take the case to court and hire an attorney to provide the help you need to recover the damages.