Breaching a contract can be a very expensive affair for any business. It could leave you financially drained yet you would have avoided all this by understanding your role in while the contract was being drafted.
Mr Jay Sakaria, business development officer Gold Star insurance services, says contract clarity entails ensuring that your contract is clear and uses precise language. It is also a great way to avoid breach of contract lawsuits before they start.
“Expectations should be spelled out in a simple language. If you’re not sure your contract meets all of your needs, consult an attorney, who is experienced in contract law, he says.
According to him, both parties involved should follow the contract because obviously, once the contract is in place you are obligated to uphold your end of it. Do the job as described in the time allotted and within the budget allowed. If you are unable to do this, the contract may have to be amended—but the other party is in no way required to do this. Never sign any contract you don’t think you can live up to.
He added that legality of the contract is very paramount since all parameters in the contract must exist in accordance with the law and cannot contain illegal requests or requirements, such as giving up legally mandated breaks, violating safety standards, or refusing to accommodate a disability. A contract for an illegal act cannot be enforced by the courts.
Mr Sakaria notes one should have a reason because there are legally valid reasons why a contract might be breached, such as being prevented, or a lack of capacity. If you’re the target of a breach of contract lawsuit, an experienced attorney can help ensure that your side is heard in court.
He advises that businesses should research about anyone they intend to enter into a contract with. Have they been accused of breach or fraud in the past? Have they been honest about their history, training, schooling, and skill? An attorney with experience in breach of contract lawsuits can help you proceed with confidence.
The business developing manager pointed out that it is always important to contact lawyers about protecting yourself in breach of contract lawsuits, or for help in filing one of your own.
Mr Geoffrey Iddani, a Kampala based procurement officer, advises business people to follow the agreements stated in their contracts since the consequences are very dire.
“In cases were one party breaches a contract, if sued and court finds the company guilty, you pay a very hefty fine which is not good in business and sometimes breaks the company down financially,” he says.
Impact of breaching contract
1. Compensatory and consequential damages: You could be forced to pay compensatory and consequential [money] damages, which is the most common remedy for a breach of contract case.
2. Punitive Damages: Although rare in contract cases, you could be ordered by the court to pay punitive damages, which can be significant amount of money.
3. You lose all the way around: You could end up spending much more money, time, and mental and physical energy resolving the breach of contract than you would have spent performing your obligations under the contract.