Why do organizations/people renege on business contracts?

IB D · Jun 10, 2023

We always hear cases of two business organizations or person being in court for failing to honor business contracts. And most times, these contracts were voluntarily assented to and signed by the defaulting party voluntarily.

What are the possible reasons that would cause a business organization or a person go back in a contract he or she willingly signed? How can this trend of not honoring business contracts be stopped?

Heatman · Jun 10, 2023

I believe that this usually happens whenever why the party is no longer meeting the goals they actually set out initially to achieve from the business contract, so they will end up terminating it along the way.

cherry123 · Jun 10, 2023

Sometimes it is due to circumstances beyond ones control. you might be serious with a contract but the money expected isn't forth coming and that will be a problem with the other party

Springtime · Jun 10, 2023

I think one of the main reasons is one party failed to fulfil the obligations listed in the agreement. That may be due to financial problems faced by the party, or something wrong with the quality of the products they provide.

Niyi Briggs · Jun 10, 2023

One thing that makes people fail to keep up with the terms of a contract is the inability or lack of willngness study and understand the terms of the contract before assenting to it. Some contract terms are very tough but some people don't even understand to counter such terms.

Etini Willie · Jun 10, 2023

Springtime said:
I think one of the main reasons is one party failed to fulfil the obligations listed in the agreement. That may be due to financial problems faced by the party, or something wrong with the quality of the products they provide.

I believe that contracts can always be renegotiated if it turns out nit to favour a particular party. That is why I don't sign any contract that doesn't have a clause for that contract to be reviewed as situation changes.

eldavis · Jun 12, 2023

I feel the mistake these people made when going into this contracts is that they looked at their current condition and just accept cause they could do it. They failed to think ahead if they would be able to cope with this on the long run or not.

Etini Willie · Jun 13, 2023

eldavis said:
I feel the mistake these people made when going into this contracts is that they looked at their current condition and just accept cause they could do it. They failed to think ahead if they would be able to cope with this on the long run or not.

It is true that people sign contracts without looking into the future. Some people signed contracts when they were rather small and discovered that the contract is no longer feasible when they became mega. That is why I support short term contracts.

Shavkat · Jun 13, 2023

I personally think that it is a part of business to encounter this kind of business conflicts with partners, clients, etc. That is why we need to go to court for resolving these issues.

Yohanna · Jun 13, 2023

Shavkat said:
I personally think that it is a part of business to encounter this kind of business conflicts with partners, clients, etc. That is why we need to go to court for resolving these issues.

In each and every partnership business that have come across, conflict is inevitable but it should not escalate to the extent that it will cause the liquidation of the business and that is why a deed of contract must be followed.

IB D · Jun 13, 2023

Shavkat said:
I personally think that it is a part of business to encounter this kind of business conflicts with partners, clients, etc. That is why we need to go to court for resolving these issues.

When a business partnership or contract gets to the point of going to court, that means it is beyond repairs. I would rather renegotiate a contract with my partner if he is open to shifting grounds.

Heatman · Jul 29, 2023

Niyi Briggs said:
One thing that makes people fail to keep up with the terms of a contract is the inability or lack of willngness study and understand the terms of the contract before assenting to it. Some contract terms are very tough but some people don't even understand to counter such terms.

I believe that whenever it is no longer feasible for the business to be profitable to the parties that are involved that is when they will decide to pull out of the contract they already agreed on.

Authenticity101 · Jul 30, 2023

Some people sign contracts without reading what is actually required of them. A good example is how we always hit "I have read and accept the guidelines" online without really reading through. People should be made to understand what they are signing to avoid this.

Bisolami · Aug 1, 2023

Heatman said:
I believe that this usually happens whenever why the party is no longer meeting the goals they actually set out initially to achieve from the business contract, so they will end up terminating it along the way.

Another thing is disagreement between the people who own the company together and they will just want to part ways when they see that they can no longer work together

King Belieal · Sep 15, 2024

Most times, it is because things have happened and the contract has become impractical. That's why people can't keep to contracts.

IB D · Oct 8, 2024

Bisolami said:
Another thing is disagreement between the people who own the company together and they will just want to part ways when they see that they can no longer work together

This happens most of the times that contracts fail. It is always because people stopped looking at the same direction.

Unyime · Oct 27, 2024

I have been in a position that I had to renege on agreements and it was because of things happening too fast that made it very difficult to keep up with the terms. But diplomatic negotiations is necessary in such instances.

Why do organizations/people renege on business contracts?

IB D

Well Known

Heatman

Team Lead

cherry123

Popular

Springtime

Well Known

Niyi Briggs

Well Known

Etini Willie

Notable

eldavis

Very Familiar

Etini Willie

Notable

Shavkat

Very Familiar

Yohanna

Notable

IB D

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Heatman

Team Lead

Authenticity101

Somewhat Known

Bisolami

Very Familiar

King Belieal

Notable

IB D

Well Known

Unyime

Somewhat Known

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