How Much Will a Breach of Contract Lawsuit Cost Your Business?
July 31, 2021
When a supplier, contractor or employee breaches their contract with your company, your business’s finances will probably suffer. Contract breaches can force manufacturing facilities to a standstill or otherwise cause delays and expenses for your business. If the breach affects the goods or services you provide to others, the failings of another party could hurt your reputation, too.
Ideally, letting the other party know about the breach would be all that it takes to get them to fix it. Unfortunately, that is often not the case. You may have to consider going to court to resolve the breach of contract and recover your losses. How much will a breach of contract lawsuit cost your company?
If You Go to Court, the Process Will Be Expensive
If you have to litigate a breach of contract issue, you don’t just have to pay for your attorney. You also have to pay for the court’s time. The more the other party digs in their heels and tries to fight you, the more the overall cost will be.
A review of litigation costs related to breach of contract cases found that the average combined expenses for plaintiff and defendant are usually around $91,000. Those costs may be one of the reasons why roughly 95% of significant business disputes end up settling before they go to court. If you can negotiate a settlement that preserves your business’s interest and reimburses you for the breach, the settlement approach may be more cost-effective than going to court.
Considering all of your options is very important when dealing with contract disputes and other business issues with legal implications.