Contract Business Work Happen Party Companies People Article

In the United States, companies use contracts to work with other companies and individuals. But sometimes these contracts are "breached" (broken) before the work is finished. Contract breaches happen when people or businesses decide to stop working on the project before it is finished, or when people or businesses "violate" (go against) one or more of the terms of the contract. Most contracts have an article titled "breach of contract" to describe the "remedies," or what should happen if the contracts are breached.

The first remedy for a breach of contract is often "mediation," where each party that signed the contract must meet with a "mediator," or a person who helps them try to reach agreement and understanding so that the work can continue. If mediation doesn't work, then one of the parties will often "file a lawsuit." "To file a lawsuit" means to take the other party to court to "recover" (get back) its "monetary damages." "Monetary damages" are the amount of money that the company believes it has lost as a result of the breached contract, so it demands that the other party pay back that money. The "judge" (the person who makes a legal decision in the court) decides how much those monetary damages should be.

Because a signed contract is a "binding agreement" (a document that has legal power), the remedies that are described in the article regarding "breach of contract" must be followed. That's why it is very important to read this section before signing a contract. You need to know what will happen if you have to breach the contract in the future.