Breaches happen – but so can smart responses.

Even the best-drafted contracts can’t guarantee perfect performance. A missed milestone, a late payment, or a supplier dropping the ball – it happens. But for in-house lawyers, a contract breach isn’t just a legal issue; it’s a balancing act between enforcing rights and preserving critical business relationships.

So, when the business flags a breach, what’s the best way to handle it without causing collateral damage? Here’s a practical, commercial approach to navigating breaches – calmly, legally, and diplomatically.

‍First – is it actually a breach?

Not every operational wobble is a legal breach. One of your first jobs is to help the business distinguish between:

• genuine non-performance of a contractual obligation, and
• misunderstandings, service issues, or delays that fall short of breach.

Check:

• What exactly was promised in the contract?
• Has the defaulting party truly failed to meet a key term?
• Is there a force majeure angle at play?

Tip: Encourage the business to focus on contractual obligations, not assumptions or verbal expectations.

‍Revisit the contract

 Before anything escalates:

• Identify any relevant clauses around performance standards, defaults, notice, and dispute resolution.
• Confirm any requirements for notifying breach (timelines, formats, procedural steps).
• Check whether informal agreements (email chains, purchase orders) have been incorporated.

A quick contract review helps you set the business up with clear, commercially sensible next steps.

Start with a pragmatic conversation

In most cases, a carefully worded conversation can resolve issues early – without anyone reaching for legal letters.

Support the business by drafting a short, factual communication they can use, something like:

“Hi [Name], we’ve noticed [the issue]. Could you let us know what’s happening from your side?”

This opens the door without accusations – and starts a paper trail if needed later.

Document everything (without going nuclear)

Advise the business to document conversations and agreements – even if they start informally.

Key reminders:

• Always follow verbal updates with an email summary.
• Keep records neutral and factual (no blame, no loaded language).

This protects your company’s position if a more formal dispute becomes necessary.

 Encourage resolution first

 Courts expect businesses to try resolving disputes before issuing proceedings – and smart businesses prefer it too.

 Offer the business structured options, such as:

• Negotiation: Proposing clear solutions in writing.
• Mediation: A neutral third-party facilitator.
• Arbitration: A binding process that’s private and faster than court.

Alternative dispute resolution (ADR) isn’t just good optics – it often saves time, money, and valuable relationships.

Get legal advice involved early (but softly)

If the breach looks serious, repeated, or financially significant, escalate appropriately – but gently.

As in-house counsel, you’re perfectly placed to:

• Confirm breach and liability risks internally.
• Draft formal breach notices or legal communications if needed.
• Advise stakeholders on commercial and reputational risks.

Sometimes external legal support is the right call – particularly if termination or damages claims are on the table. Framing external engagement as a way to de-risk (rather than fight) often keeps the tone constructive.

 Early advice is cheaper and cleaner than a late-stage firefight.

 Termination – the nuclear option (handle with care)

 If the business wants to terminate the contract, tread carefully:

 Confirm whether the breach gives a clear right to terminate.

• Follow the termination procedure exactly (notice periods, written communication).
• Advise on commercial realities: cost of finding new suppliers, service continuity risks, reputational impact.

Terminating a contract incorrectly could expose your company to counterclaims – and unpicking that is messier than resolving the original breach.

Final thought – firm, fair, and future-focused

Contract breaches are inevitable. How you help the business response defines your vale as an in-house lawyer.

Handled well, even serious breaches can be resolved pragmatically – strengthening trust with internal teams and external partners alike.

If you’re facing a thorny breach or termination issue and want pragmatic legal support, we’re here to help. We work closely with in-house teams to manage disputes commercially, cost-effectively, and with as little disruption to the business as possible.