There are times when a contract may not be something you can live up to. Whether it’s because of outside forces or internal problems, it’s an issue if you can’t fulfill a contract. Contracts are normally legally binding, so failing to complete or fulfill a contract is a breach of contract that could be taken to court.
Any business contract creates obligations between parties. Legally speaking, any failure of either party to fully fulfill those obligations is a breach of contract. Depending on how serious the breach is, it could lead to a lawsuit.
You have the opportunity to speak with the other party about any issues you’re having with fulfilling the contract, but be aware that the other party can seek to have the contract enforced and may ask to have any financial harm caused covered. The court, seeing a binding contract, may award legal fees and financial losses to the other party if you breached the contract.
There may be the chance to go through negotiations or arbitration instead of court if you included an arbitration clause in your contract. This would keep you out of the courtroom and let an arbitrator decide if it’s fair to let you out of the contract or on how to proceed to complete the contract. In most cases, the nonbreaching party has the right to cancel the contract and then to sue to get back any losses that they suffered as a result of the breach. Your attorney can help you understand your rights if you have or may breach a contract.