Know Your Options in a Colorado Contract Dispute
Your business entered a contract with another business and both sides seemed pleased. You thought everything was set and anticipated smooth sailing. Then things suddenly fell apart. The firm with which you contracted did not live up to its commitments, and you are left wondering about your options.
Understand what it means to “breach a contract”
Breach of contract is a fancy way of saying someone or some company that entered into a contract failed to fulfill their end of the bargain. For example, if business owner Jones contracts with farmer Smith to deliver two tons of apples to his applesauce factory by 5:00 p.m. Tuesday night and Smith fails to deliver until Wednesday evening, Smith has breached the contract.
The breach would be considered immaterial and Jones would not be entitled to monetary damages since he suffered no real damage by the late delivery. However, if Jones had hired on a special work team to process the apples on Tuesday night so he could meet his own delivery deadline at stores by Wednesday night, Jones would have experienced a monetary hardship through the breach of contract. In this case, the offense would be considered a material breach.
What to do if a contract is breached
The first thing to do if you feel a contract has been breached is to contact a knowledgeable business lawyer and ask him or her to review the contract, analyzing all the rights and obligations. Also determine if your contract mandates that resolution be reached through mediation or binding arbitration.
Whether or not mediation is required, speak with the business owner and attempt to resolve the issue on your own outside of court. This will save a lot of time, money and hassle if you can work out the difficulties among yourselves. If both parties decide they want to terminate the contract, they may need to write a separate agreement to rescind the original agreement.
If your efforts to work things out fail, your attorney will need to sue the offending business for damages.
The first step in beginning legal action is to have your attorney send a demand letter to the offending party outlining the breach, what must be done to remedy it and how you expect to be compensated for damages. It is most effective to send the demand letter when there is a material breach because in most cases unless a material loss has occurred, it can be difficult to have the contract nullified.
Defenses against breach of contract charges
There are many defenses against breach of contract that have been successfully used in Colorado including these and others:
- The contract was verbal but should have been in writing
- The contract is illegal – perhaps it violates tax law or concerns an illegal substance
- There was a failure to mitigate damages – the offending party did nothing to lessen the other party’s damages once they knew they were not going to uphold their end of the contract
- The person entering the contract lacked the capacity to contract – the person was under age or mentally incapacitated
In deciding your case, the court will rely on statutes as well as past court decisions. Your best ally in bringing a lawsuit in a contract dispute is an able and experienced business attorney. The business lawyers at Robinson & Henry in Castle Rock are able to provide you with expert legal advice both before and throughout your contract dispute. In addition, they are skilled at reviewing business contracts and helping businesses craft agreements that meet their clients business objectives and avoid costly and time consuming legal battles. Call 303-688-0944 for immediate assistance or advice with your contract needs.