What Legal Steps Should Be Taken When a Vendor Violates a Service Contract?

Though signing a service contract with a vendor defines expectations and protects all parties, there are instances in which vendors aren’t willing or able to fulfill the contract’s terms. When that happens, there are some legal steps you can take in Las Vegas to remedy the situation, beginning with consulting a contracts attorney.

Step 1: Review Your Contract

The first step to take when you suspect a breach of contract has occurred is to review the contract to confirm your suspicions. Thoroughly study the terms and focus on performance clauses, deliverables, terms of payment, schedules and deadlines, and any specified remedies for disputes. All these factors could impact your next steps, so it’s important to understand the contract’s terms and how the other party may have violated them.  

Step 2: Define the Breach

It’s important to determine the type of breach involved in the dispute, as different remedies are available for each kind. A material breach is when one party fails to fulfill a major stipulation of the contract. These cases often require litigation. A minor breach is when a minor clause is breached, but the contract can still fulfill its purpose. An anticipatory breach is when one party states that they cannot, or will not, fulfill the terms.

Step 3: Communicate With the Other Party   

When you suspect a breach has occurred, you should first address it with the breaching party. Explain the problem to them, using any evidence you have to support your statements, and ask for an explanation or a proposed resolution. Once initial contact is made, it may be necessary for your attorney to draft a demand letter that clearly states the problem, the contract terms that were violated, your expectations for resolving the issue, and a deadline for fixing it.

Step 4: Seek a Resolution or Mediated Remedy

If the demand letter doesn’t result in immediate resolution, you can attempt to negotiate a solution or seek one through mediation or arbitration. Your attorney can negotiate directly with the breaching party’s counsel to find an agreeable solution. Or, you can pursue mediation, in which a third party negotiates a compromise. Finally, there’s arbitration, in which the parties agree to have the case decided by a neutral arbiter through a binding ruling.

Step 5: File a Lawsuit

If none of the prior steps garner a satisfactory result, you can seek damages by filing a breach of contract lawsuit. The court will review the contract and the evidence of a breach and make a ruling. The court may award you damages to compensate for losses caused by the breach, compel the breaching party to fulfill the contract terms, award punitive damages if the breach is deemed to be malicious, and require payment of the claimant’s attorney fees.

If you’ve been the victim of a breach of contract in Nevada, there are actions you can take to recoup your losses and ensure that you aren’t penalized for the failure of another party to fulfill contract terms. To speak with an experienced attorney today about your rights in a breach of contract, contact Hutchings Law Group in Las Vegas, NV, today.

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