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5 dangers of not sending default notices in a contractual relationship
Arjen van Berkum |
May 2, 2024 |

 14,633 total views

Eight ways to improve legal and compliance risk management

To fully explain the dangers of not sending default notices in a contractual relationship, it is essential to understand the significance of default notices in terms of contracts. Here is my top 5.

Loss of Legal Protection

Default notices serve as a formal communication to the party in breach of the contract, outlining their failure to meet their obligations. Failure to send these notices may result in the breaching party claiming ignorance of the breach, weakening the legal position of the aggrieved party.

Risk of Misunderstanding

Without a clear default notice, the breaching party may not realize the severity of their breach and the potential consequences outlined in the contract. This can lead to disputes and potential escalation of the situation.

Impact on Remedial Actions

Default notices typically specify a timeline for the breaching party to remedy the breach. Without such notices, the breaching party may delay or ignore taking corrective actions, leading to prolonged non-compliance which can harm the performance of the contract.

Lack of Documentation

Sending default notices establishes a clear record of the breach and the steps taken to address it. In the absence of these notices, it becomes challenging to prove non-compliance and the subsequent attempts to resolve the issue, making legal recourse more difficult.

Financial Implications

Failure to send default notices may hinder the aggrieved party’s ability to claim damages or enforce penalties specified in the contract for breaches. This can result in financial losses and impact the overall enforcement of contractual terms.

Now why don’t we send them? Are you afraid of damaging the relation? Sometimes it is actually helping your counterpart to gain extra leverage for you internally.

A default notice doesn’t mean you want to end the relation, you are presenting a yellow card. A warning. Make sure you don’t forget else you might end up in a much more difficult situation.

Author: Arjen van Berkum

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