One common reason for business litigation is when contracts are breached. Some parties will try other steps before litigating. For instance, it could just be a communication issue, so they may reach out to the other party to find out if there is a problem. Even if they believe there has been an intentional breach, they may try negotiating first.
But after that, litigation may be their only recourse. At this time, there are three key elements to keep in mind.
Was there a valid contract?
Part of the reason why it is important to use written contracts is that you do need to demonstrate there was a valid contract between both parties. A handshake deal can be complex because you may believe that certain terms were agreed to, but the other business owner may completely disagree with your position. They may say they never agreed to anything officially, even if the two of you had conversations about working together.
One side did not uphold its obligations
Next, you have to show that the valid contract was breached. One party upheld its obligations under the agreement, but the other did not. Maybe they never delivered products or services, or perhaps they missed a key deadline.
The breach led to damages
The point of litigation is often to seek financial compensation. As such, you have to show that there were real financial damages due to the breach. An example could be if you run a company that needs to buy parts and materials to make products and fulfill orders. If the supplier breaches the contract by failing to make a delivery, your business may suffer harm through lost sales and damage to its reputation.
Business litigation over contract breaches can be complex, so it can often help to work with an experienced attorney.