Ohio businesses often enter into written agreements with other businesses or individuals. These contracts contain the terms of those agreements between the parties. A business that decides not to honor a contract faces many potential consequences. Contract disputes can cause damage to one's business in numerous ways.
Failing to honor a contract can do irreparable harm to one's business reputation and relationships. Many consumers and other entrepreneurs often associate with those who are trustworthy in their dealings. Business owners who breach contracts may have difficulty finding others who will do business with them because of their reputation for not following through.
Depending on the damage the contract breach causes, the business owner may find him or herself involved in legal action that can deplete important resources the business needs. The consequences for breaching a contract can include the payment of compensation to the other party as well as punitive damages if the court finds that the circumstances warrant that relief. This could mean a significant loss to one's company. In fact, refusing to honor the terms of a contract can result in a substantial setback for one's business.
An Ohio business owner who believes he or she has a valid reason to breach a contract would do well to seek legal advice about the best way to proceed. On the other hand, a business that fulfilled the terms of a contract only to have the other party renege may have cause for taking legal action. The counsel of a business attorney may prove invaluable for any party involved in contract disputes.