Contract Enforcement

Filing a lawsuit in state or federal court is perhaps the most familiar method for enforcing a contract, but it’s not the only way. In fact, many contracts will specify alternative arrangements for enforcing the agreement, including private arbitration or mediation. In arbitration, the outcome of the proceeding can be binding on the parties.

With few exceptions, courts reliably confirm arbitration awards through a streamlined petition process, transforming the arbitration award into a bona fide court judgment. Mediation, on the other hand, is a non-binding, voluntary dispute resolution process assisted by a skilled mediator, often a retired judge. Unlike a civil lawsuit, arbitration and mediation are private services that are not required to be open to the public. As a result, the parties must agree to using these private services, either before a dispute arises (often in the contract itself) or after.

While there is no one-size-fits-all answer to selecting an appropriate enforcement process, our experienced attorneys can help you to identify the most efficient and effective path forward, given your goals and circumstances and what terms or provisions will most incentivize compliance in the first place.

Regardless of which enforcement process best fits your business needs, there are several contractual provisions that skilled litigators routinely rely on to secure the most efficient, cost-effective recovery for their clients. Such provisions may include requiring mediation or arbitration instead of (or in addition to) filing a lawsuit. Among others, these include:

• Requiring a party that breaches a contract to pay the other side’s attorneys’ fees.
• Specifying where a lawsuit, mediation, or arbitration must take place and who will serve as the arbitrator or mediator.
• Specifying what law will apply to the contract.
• Requiring one or more parties to provide collateral as security for the debts owed under the agreement.
• Providing that a prevailing party in any dispute shall be entitled to liquidated damages for losses that, by their nature, are too difficult to calculate.

Deciding whether to adopt any or all of these provisions, including whether arbitration or mediation should be required, depends on the circumstances. This is why it’s important to consult an attorney early, before a problem arises and even before a contract is entered into.

Given the shifting nature of the law, the resources available to the courts, and multidimensional analysis of how best to pursue collection on a debt, you and your business should continually reevaluate what makes the most sense given your current circumstances and goals. You should then update your contracts accordingly.

In some instances, obtaining a court-issued money judgment may be the only viable option for you to collect on an outstanding debt. Fortunately, once you’ve obtained a judgment, there are a variety of methods available for you or your business to collect on the debt, including:

• Debtor’s examinations to identify the debtor’s assets and financial accounts.
• Judgment liens on real property.
• Wage garnishment.
• Requisition of the debtor’s personal assets.

Navigating these processes can be complicated and may result in varying degrees of success. Attorneys familiar with debt collection can expeditiously identify the debtor’s assets and income, and help you determine the most efficient way to collect on the debt.