Contracts are the backbone of your business. When a customer, vendor, or partner doesn’t hold up their end of the deal, the consequences can be costly—delayed revenue, broken trust, and even operational setbacks.
So what happens when a contract is broken? Should you sue? Or would that cost more than it’s worth?
Let’s break it down.
What Is a Breach of Contract?
A breach of contract happens when one party fails to perform their obligations under an agreement—whether it’s not paying on time, delivering poor-quality work, or failing to perform altogether.
There are typically three types of breaches:
- Material breach: Serious enough to justify termination and a lawsuit
- Minor breach: Less severe, but still may entitle you to damages
- Anticipatory breach: One party makes it clear they won’t perform before the deadline hits
Some Questions to Ask Before Suing
1. Is the contract enforceable?
If you have a signed agreement with clear terms, you’re off to a strong start. Even without a written contract, you may still have a case—but documentation is key.
2. What are the actual damages?
Courts usually award monetary damages based on the loss you suffered—not emotional harm. You need to calculate:
- Lost revenue
- Costs incurred due to the breach
- Time or resources wasted
Generally, if your damages are under $25,000, a full-blown lawsuit may not be financially justifiable unless attorneys’ fees are recoverable.
3. Can you actually collect?
Even if you win, you’ll want to be sure the other party has the money or assets to pay a judgment. Suing someone with no funds may be a hollow victory.
4. Is there a better option than litigation?
Not all disputes require a lawsuit. Sometimes a demand letter, strategic negotiation, or mediation can get the job done faster—and cheaper.
Get Clarity Before You Sue
Legal action is serious—and expensive. But so is letting someone walk away with your money. That’s why DaPonte Law offers a Strategy Session for business owners dealing with breach of contract issues.
In this flat-fee session, we will:
- Review your situation and contract
- Assess the strength of your claim
- Outline your legal options (and alternatives to litigation), and
- Deliver a custom Legal Strategy Plan you can act on
Ready to Take the Next Step?
If you’re unsure whether to sue—or just want to know where you stand—don’t wait.
Schedule a legal Strategy Session today!