Business owners often make deals with third parties for goods and services. They memorialize mutual agreements in contracts. What happens if something goes awry and one side does not uphold the terms and conditions?
A breach of contract is the most common form of dispute that arises between businesses. However, there are other ways contract disputes erupt. Learn some of the mistakes entities deal with when one party does not go stick with an agreement.
Disclosure of confidential information
When a business contracts with a merchant, manufacturer or another provider, an exchange of sensitive information occurs at some level. Standard business contracts contain a clause that deals with penalties regarding the disclosure of trade secrets or company operations. A party that disseminates a business’s confidential information may face serious legal consequences.
Some business contracts occur between employees or contractors to perform work at the business. Those who enter into employment with the company may sign a non-compete agreement. A non-compete intends to stop employees from working for a competitor after the current job ends. Often, employees breach this when leaving a company, especially if the departure is not voluntary.
Companies need offices or storefronts from which to operate. Other businesses rely on equipment rental to perform tasks. Leases memorialize the terms of a rental, the amount due monthly and other conditions. Lease breaks happen when a company does not pay or the lessor fails to maintain the product or location in a working fashion.
Contract disputes may take time and money to resolve. However, enforcing the terms of a legally binding agreement may prove necessary to a business’s bottom line.