| Read Time: 4 minutes | Business Law
breach of contract settlement

Not every legal dispute has to go to court. Parties who disagree over contract terms or the performance of contract obligations can work out their differences in a breach of contract settlement.

However, a settlement agreement is not something to jump into without preparation. A party who wants to maximize their recovery and protect themselves in a settlement will likely need to put in a substantial amount of prep work.

Getting ready to settle a breach of contract case can be light work when an experienced breach of contract lawyer is at the helm. At Massingill, our breach of contract lawyers have decades of combined experience, and we can guide our clients through any type of contract dispute. Those who are contemplating a breach of contract settlement should give us a call if they need help.

A Party Should Know Their Needs and Priorities

A contracting party should not start negotiating a settlement until they know what they need from it. These needs can include financial and practical ones. 

A contracting party seeking to settle might want to ask themselves the following:

  • How much money have they lost on the deal so far?
  • How much money will they likely lose if they continue under the contract?
  • How much would they pay to hire someone else to finish the contracted-for task? 
  • Has either party’s breach made them liable for any liquidated damages found in the contract?
  • How long would it take to have someone else complete the contracted-for task?
  • How important is it for the other party to complete their contract obligations?

When a party thinks about the issues above, they should itemize their financial and practical needs and rank them by level of importance. Answering the above-listed questions and listing priorities can let a party know how much money to ask for and what concessions to request at the outset of a negotiation. And as talks continue, the contracting party’s list of priorities can help them determine whether a settlement offer is worth waiving their right to a trial.

A Party Should Know Their Opponent’s Needs and Vulnerabilities

Negotiating a settlement is a back-and-forth process between multiple parties. It’s just another bargain. So, a party seeking a settlement should have some leverage when sitting at the negotiation table. An opponent in a breach of contract settlement might be more likely to grant the other party’s requests if the opponent sees that they will likely lose more at trial than they would lose in the settlement. 

Factors a party looking for a settlement might want to consider can include:

  • Whether a judge would likely order their opponent to pay liquidated damages (and how much),
  • The size of the opponent’s business or any disclosures they have made about their financial resources,
  • How long a court case would likely take, 
  • How much discovery would be necessary to litigate a court case,
  • Whether the opponent has pressing deadlines that might make them eager to resolve the dispute quickly, and
  • Whether the opponent is private and prefers a confidential settlement over a public trial. 

Highlighting an opponent’s desire for privacy, busy schedule, or the cost of going to court could, among other things, convince an opponent to make a better settlement offer in the hopes of quickly or quietly ending a dispute.

A Party Should Research Their Options

Someone looking for a settlement should know their options before discussing settlement terms. Can the party find someone else to handle the work their opponent was supposed to handle? And can that party afford someone else’s services?

If so, the party seeking settlement might want a settlement that allows them to cancel the contract. Is the party looking to settle likely to win a large award at trial? If so, they may want to hold out for a better offer during negotiations. If not, they may want to focus only on getting the highest items on their priority list and letting the rest go. 

The above are a few questions someone may want to ask before starting the settlement process. Consulting a knowledgeable contract attorney can help ensure that a party in a contract dispute knows all their options before deciding how to resolve their case.

A Party Should Have a Settlement Timeline

Not every settlement negotiation ends in an agreement, and parties that fail to agree might have to take their case to court. However, there is a time limit for suing for breach of contract. Typically, parties to a contract have only a few years to sue. So, someone seeking a settlement should know the deadline for filing a lawsuit to gauge when they should keep negotiating or start litigating.

A Party Should Consider Consulting a Lawyer

An attorney can ensure that a party to a contract considers all of the above before settling with their opponent. A good contract attorney can do the following to make the best out of a party’s settlement opportunity:

  • Identify all legal principles that apply to the party and the opponent,
  • Calculate the party’s financial needs in a settlement,
  • Identify the party’s practical needs in a settlement,
  • Identify and calculate each party’s risk in going to trial,
  • Timely file a lawsuit,
  • Timely respond to a lawsuit,
  • Gather evidence relevant to resolving the dispute,
  • Make the best arguments for resolving the dispute, and 
  • Draft favorable and enforceable settlement terms.

Massingill is a premier firm of contract attorneys who can help today.

We Can Guide You

If you don’t know where to start with a contract settlement, contact us. The skilled contract attorneys at Massingill have multiple decades of experience and can clarify and simplify any contract issue for our clients. We also offer no-nonsense, flat-fee pricing, which makes our top-level services accessible to many in the Texas community. To schedule a consultation, call us today or contact us online.

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Joshua Massingill

Joshua Massingill is an attorney practicing in Austin, Texas. He serves on the Texas State Bar’s Law Practice Management Committee, the Leander Educational Excellence Foundation (LEEF) Board of Directors, and the Success-Werx Board of Advisors. He mentors young entrepreneurs in Leander ISD’s INCubatorEDU program and is active in his church.

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