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In the Breach

Having dealt with breaches small (missed deadlines for clients’ contributions to a project) and large (non-payments well over $150,000), I’ve learned to respond with a series of quick, assertive, proactive steps the moment I realize the breach.  

I’m not an attorney, and this post isn’t offering legal advice.  But here’s how I handle breaches of contract with the wisdom of hindsight.

Much like good receivables management, which really is just a process for managing contract breaches of delayed payment, a quick phone call usually takes care of infractions.  Immediate contact alerts the other party that I’m paying attention and will not tolerate non-compliance. I ask for a clear commitment to resolve the breach quickly.

I take any delays about commitment from the other party very seriously.  Especially in the case of breaches that impact my ability to perform on a contract or my compensation.  I escalate immediately with a written request for compliance and response within the week (or even day if the breach has paused production.)  I escalate again with a call to the highest authority in the other party’s realm, and follow up in writing.  In total, I allow no longer than 2 weeks for resolution.  Setting a deadline assures I don’t creep beyond the window for likely resolution.

If at this point, the breach remains, I proceed with legal action. Again, I march at the quickstep to minimize my investment of time, energy and legal costs.  I insist my legal counsel proceed assertively –  I’ve already given the other party plenty of opportunity for the easiest response.  If I get as far as legal response, I go in aggressively, swinging my biggest stick, to get what my counsel advises is my most likely outcome of our pursuit.

I have made a mistake in extending too much slack hoping to preserve the relationship.  What I have learned is that relationships worth preserving are mutually-respectful and committed to contract compliance. Enforce your agreements, cut any losses as soon as possible, and get back onto work with those worthy of your contractual integrity.


One Response to In the Breach

  1. Geoff April 17, 2014 at 10:56 pm #

    This is great stuff. I can see this being an area where we as owners can get emotionally highjacked and not handle the situation as thoroughly as you’ve described. Thank you.

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