Breach of Contract Claims for Small Businesses: Part II – Preparation and Defense

At Kohnen & Patton LLP, we proudly represent small business owners across Ohio, Indiana, and Kentucky. Our goal is to equip you with the knowledge needed to safeguard your operations and protect your livelihood. If you have not done so already, we encourage you to also read part one of this two part series: Breach of Contract Claims for Small Businesses: Part I – Prevention.

Enforcement and Remedies for Breach

Even with strong contracts in place, breaches can and do occur. When a party fails to uphold its obligations, small business owners must know the enforcement process and the remedies a court may provide. Understanding these options in advance allows you to act quickly and strategically, minimizing disruption to your business.

When a breach occurs, here are steps you can take: 

1. Review the contract carefully to confirm the breach and check for notice requirements or cure periods that may require you to notify the other party of the breach and allow the other party a period of time to correct the underlying issue.
2. Send a demand letter that clearly states the breach, includes any required notices, references the contract terms, and requests timely performance or payment.
3. Attempt negotiation or alternative dispute resolution (ADR), such as mediation or arbitration, to resolve the matter outside of court.
4. Pursue litigation if no resolution is reached, bringing the dispute before a judge.

If the case proceeds, courts have several remedies available depending on the circumstances:

• Damages – Financial compensation to cover losses caused by the breach. These can include direct losses, such as unpaid invoices, and sometimes indirect losses, such as lost profits.
• Specific performance – A court order requiring the breaching party to fulfill their contractual obligations, typically used when the goods or services are unique and money alone cannot make you whole.
• Rescission – Canceling the contract and returning both parties to their original positions, often applied when the contract was undermined by fraud, misrepresentation, or other serious issues.
• Liquidated damages – A pre-determined amount specified in the contract to be paid in the event of a breach, enforceable if deemed reasonable rather than punitive.

By following a structured process and understanding the available remedies, small businesses can respond to breaches with confidence and protect their operations and bottom line.

Responding to Breach of Contract Litigation

If your business is facing a breach of contract claim, taking the right steps early can significantly impact the outcome. 

The first priority is to gather all relevant documents, including the signed contract, relevant emails or text communications, invoices, and payment records. Having a complete paper trail allows you and your attorney to evaluate the strength of the claim and prepare an effective response. From there, it is important to review the contract’s validity carefully:

• Was the agreement properly executed? 
• Are all signatures valid? 
• Were there any factors, such as fraud, duress, incapacity, or mistake, that could call the contract’s enforceability into question?

Once the basics are established, you can begin to assess potential defenses. In some cases, there may not have been a breach at all, or the contract terms may be ambiguous and open to interpretation. In other situations, performance may have been excused due to impossibility or other legally recognized defenses. 

Throughout this process, experienced legal representation is critical. A skilled attorney can identify weaknesses in the opposing party’s claim, develop a strategy tailored to your circumstances, and guide you through negotiation, settlement, or, if necessary, litigation in court.

Prevention First, Preparation Always

For small businesses in Ohio, Indiana, and Kentucky, strong contracts are not optional — they are foundational. Prevention through clarity and good contract practices saves time, stress, and money. And when breaches happen, being prepared and knowing your legal options (and defenses) is essential.

At Kohnen & Patton LLP, our team helps business owners draft optimal contracts, enforce breaches, and defend claims in Ohio, Indiana, and Kentucky. If you want to make sure your contracts protect you or need help addressing a breach, feel free to reach out to one of our attorneys today.