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Of Businesses Worldwide

When a breach of contract leads to failure of payment

On Behalf of | Mar 26, 2022 | Collections |

When you’re setting up a business contract, you’ll probably start with the goods and services rendered. But the second part of that contract is likely the amount of money that is to be paid for those goods and services. You can negotiate all sorts of aspects of these terms, such as discounts that will be provided or when the payments need to be made, but the focus of the contract is simply to show what obligations both sides have and what they should receive from the other party.

As such, a breach of contract could simply mean failure to pay after those goods and services have been provided. This is especially problematic in the case of services, as they can’t be reclaimed. The time has already been spent and you need the proper compensation. This may also be true with a lot of different types of goods, although some goods can be reclaimed if payment fails.

So what can you do?

This is definitely a frustrating situation, as you expected the other side to hold up their part of the contract, and you certainly know that you upheld yours. Your first step is simply to contact them and see if there’s been some sort of mistake, such as a lack of understanding about when or how payment was supposed to be made. But it may turn out that the other party is difficult to contact or has no intention of paying you at all.

In a situation like that, then it’s important to begin looking into your legal options. You still deserve that money, but it may take a bit more than you expected to get it.

 

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