Some folks’ first reaction when someone on the other end of a business deal fails to do what they were supposed to do is to run to the courthouse to file suit. While this might make the wronged party feel better in the short term (and will certainly make his/her attorney feel better $$), immediate legal action is not always the best route — at least not right away.

There are many reasons a person may fail to do what they promised to do under a contract or agreement. Some are truly outside the control of the party (e.g., their truck broke down en route to the plant), while others are more deliberate (“we’re not paying you until we’re good and ready”). Do you really want to incur legal fees — and permanently alienate the other party to your agreement — for a relatively innocent failure to perform? Probably not.

If you agree to work with the other party by giving them a “do over” or other concession, use the opportunity to get it in writing. Something like this: “OK, we both acknowledge that you didn’t deliver the widgets per our agreement, and I lost some sales as a result. You can make it up to me by placing your next order for twice the usual number of widgets, OK?” See? Good result, no law suit. 

Finally, also keep in mind that, unless your contract says that you get your legal fees paid by the breaching party if you sue for enforcement, it is highly unlikely that you will recoup your legal fees — even if you win. 

Summary: When faced with  a breach of an agreement, resist the emotional response. Figure out whether it makes sense to work through the problem with the other company before running to the courthouse.