One potential reason for litigation between two businesses is when one owner breaches a contract. The owner of the other business could suffer significant financial harm and may take legal steps to enforce the contract or recover compensation for the money they’ve lost.
For example, perhaps you are a business owner who has developed a product that is in high demand. Your facility builds those products and ships them to retailers. You have contracts with those retail locations, but you also have a contract with a parts and materials supplier.
Missing a deadline
However, say that the parts and materials supplier breaches their contract by missing an important deadline. You don’t get the shipment that’s needed at your facility, so your production numbers plummet.
As a result, you miss shipments to retailers that were expecting them. The owners of those retail locations may then consider terminating their contracts with your business, costing you long-term opportunities. You may also lose out on sales that you would have otherwise made because your products are not on the shelves.
As you can see, there is a ripple effect that can cause significant financial harm. A missed deadline is often considered a minor contract breach, but it’s not so minor when it means that your business can’t function as intended. If you lose sales or even lose contracts and relationships you already had established, that can put significant financial strain on your business. It may even harm your business’s reputation moving forward.
Fortunately, there are legal steps you can take. This type of litigation can become very complex, so it’s important to get experienced legal guidance as you explore your options.