What Should You Include When Sending a Notice of Breach in a Contract Dispute?
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If you have a legal contract with another party and believe they aren’t upholding the terms of the contract, the first legal step to take in resolving your contract dispute is to provide a notice of the breach. This notice is generally given in the form of a letter that contains several key points:
- An explanation of the failure to perform
- Why you believe there has been a breach of contract
- Statement of the next steps that should be taken, which may include a fix for the problem or indicate a desire to end the contract
Each notice of breach will be a bit different, depending upon the circumstances of the breach. Some will be very specific with a detailed course of action and timeframe, while others will be more general and may simply provide an invitation to discuss the problem. Your Queen Creek business attorney can help you determine how to write your notice of breach to best remedy the situation. In fact, we highly recommend that you have an attorney help you with this document, which will surely be an important part if any lawsuit related to the contract arises.
What Should Be Included In My Notice of Breach?
Be sure to include these specific elements in your notice of breach:
- A clear date: A notice of breach establishes a clear record and paper trail of the dispute, so it’s crucial that your notice clearly indicates the date.
- Verify the notice clause: Many contracts will have a clause, usually called the notice provision, that indicates contact information for each party and a preferred method of communication. When sending your notice, you’ll need to confirm that it is being sent to the right person. Check the notice clause before emailing, faxing, or sending your notice through the mail to be sure you are operating within the contractual guidelines. Failing to observe the notice clause will delay a solution and may prevent your notice from being legally valid. It’s possible for an improper notice to derail an entire lawsuit!
Describe the alleged breach: Your notice must clearly indicate which part of the contract is believed to have been breached, including the specific clauses. Typically, this will be one of three general problems:
- The other party has failed to perform as agreed, such as you were not paid or have not received the goods.
- The other party is refusing to perform a required contractual obligation.
- The other party has made it impossible for you to perform your obligations; for example, you can’t make the software work because the company refuses to share its password.
Verify that your notice describes a material breach of contract: Discuss this important distinction with your Phoenix business attorney. Although you may provide notice for any kind of breach, courts will generally only permit relief for material breaches. A material breach refers specifically to actions that destroy the essence, heart, or purpose of the contract.
- Offer a “cure”: Sometimes, it’s too late to fix the problem, so the notice of contract terminates the contract and attempts to seek damages. In most cases, however, a notice of breach is an attempt to resolve disputes while maintaining the contract. Your notice may recommend solutions with a proposed time frame, such as 30 days. Occasionally, the other party does not realize there is a problem until they receive your notice, so offering a cure can be very beneficial to your business relationship.
- Maintain a professional tone: Don’t let your notice of breach become emotional; keep it dispassionate and professional. Like all correspondence that precedes a lawsuit, your notice could eventually be filed with the court for everyone to read. Stick to the facts.
- Try to work it out informally: In many cases, an informal conversation can help you solve problems before you need to send a formal notice while also maintaining your business relationship and saving you time, money, and work. Don’t use a notice to try to intimidate the other party or threaten a lawsuit, because this will usually backfire.
- Send a contract termination separately if needed: If you and the other party want to terminate your contract formally, it’s usually best to draft a separate document that terminates the contract. Your Peoria business attorney may need to draft a more complicated termination and release document if some of the contractual obligations have already been fulfilled.
What Response Should I Expect?
After you’ve sent your notice of breach, you’ll likely receive one of the following responses from the other party:
- No response: If this happens, you might send a second letter referring to the first. It’s best to consult with your Paradise Valley business attorney about how many notices to give, and how long those notices should be.
- Disagreement: Sometimes, opposing parties will respond by indicating that they don’t believe there has been a breach. Always consult with your attorney before sending an angry response because it’s possible the other party is correct, or at least has a possible argument that could be correct.
- Let’s talk: If the other party indicates that they want to talk through the problem, you may be on your way to resolution. Consider involving an attorney for advice.
- You’re right: In this case, it may be time to draft a formal termination to end your business relationship.
Learn More About Notice of Breach from Arizona’s Leading Business Attorneys
If your business needs to explore solutions to a breach of contract, contact the attorneys at Denton Peterson Dunn. We have the expertise and experience you need to effectively resolve contractual disputes that are costing your business time and money. Let us help you get your contracts in order so you can get back to doing business! Contact us today.