Before You Breach a Contract: What You Need to Know

In business, and in many aspects of life, contracts are signed.  The purpose of this is to lay out responsibilities and obligations of each involved party so that it is clear what is expected of each participant. Usually, 0nce the agreement is made, that is the last you will hear of it.  Both parties fulfill their obligations, and the contract is simply filed and forgotten.  What happens, however, if the obligations in the contract are misunderstood, or if one party changes their mind and feels unfulfilled?

Consider These Business Legal Consequences Before You Breach

When you decide not to fulfill a contractual obligation, that is a breach of contract.  Before you take this step, make sure you consider the following business legal consequences.

business legal consequences


When one party breaches a contract, the non-breaching party may be able to pursue monetary damages from the breaching party.  This applies to written contracts and even verbal contracts, although you should always have a written contract prepared by a professional lawyer in order to ensure its execution.


Reputation is a big part of a business.  Before you breach a contract, consider the fallout to your professional reputation.  Weigh the circumstances with the potential consequences.  You may want to consider your current reputation and standing in the community.  Are you a long-term business with a great reputation?  Then, you may have a better chance of surviving the windfall in a breach, as long as there is a defendable reason.  If you are a newer, unestablished business, or have a reputation of breaking your word for whatever reason, you should seriously consider the potential consequences.


Who is the contract with?  Is this someone you need on a regular basis to fulfill your business?  Or is it someone who would not really affect you long-term?  What are their connections in the community, and could breaching the contract extend to other relationships being ruined?  These are all serious considerations.

Before you breach a contract, you should seek the advice of an experienced business law attorney. You should understand your rights and the other party’s rights under the contract. You should also understand what damages you may be liable for under the contract.


You need to weigh the expense of your time and money that you would spend if you got sued for the breach with the actual cost of fulfilling the contract.  When weighing what you can afford, also consider other legal repercussions of breaching the contract.

The best way to determine whether you should breach a contract is to discuss the situation with an experienced business lawyer in New York.


This entry was posted in Blog, Business Law and tagged . Bookmark the permalink. Follow any comments here with the RSS feed for this post. Both comments and trackbacks are currently closed.