The Most Effective Procedure for Responding to a Breach of Contract

 







When a contract partner fails to fulfil their obligations — whether by delay, non-performance, partial performance or otherwise — such breach of contract can threaten your rights, business, or personal interests. As someone experienced in legal assistance for foreigners and businesses, I want to guide you through a clear, methodical procedure to respond effectively when faced with a contract breach. This helps you protect your rights, prepare evidence, and decide on negotiation or litigation with confidence.

What is a “Breach of Contract”? (Legal context)

Under the civil law regime, a contract creates binding obligations between parties. When one party fails to perform as agreed — for example failing to deliver goods or services, delivering defective goods, delaying performance, or performing incompletely — that constitutes a breach of contract.

Depending on the severity and nature of the breach (e.g. total non-performance vs minor delay), the innocent party gains certain rights: to demand performance, to claim damages, or to rescind / terminate the contract and seek compensation. 

Step-by-Step: Effective Response Procedure

  1. Review the contract carefully

    Begin by studying the contract terms in detail. Pay attention to obligations, deadlines, quality standards, delivery or payment terms, and any clauses about breach, liquidated damages or dispute resolution. Many contracts include clauses that specifically address breach-of-contract scenarios (e.g. payment schedules, delivery deadlines, penalty or damage clauses). 

    If there is a clause for liquidated damages or penalty in case of non-performance, that clause may become the basis for your claim. Under Korean law, liquidated damages agreed in advance are recognized. Gather and preserve all evidence

  2. Collect all documents, communications, records, invoices, delivery receipts, photos/videos, correspondence (email, chat, letters), proof of payment or non-payment — essentially any material that proves (a) the agreement, (b) what was promised, and (c) that the counter-party failed to deliver or performed inadequately. 

    Good documentation is crucial especially if you will demand performance, negotiate, or later file a lawsuit. Without solid evidence, it is hard to prove breach or to calculate damages.











  1. Send a formal demand letter (or notice) — Demand for performance or remedy

    Before jumping to litigation, a standard and often effective first move is to send a formal written demand — often via lawyer — specifying the breach, the remedy you expect (performance, delivery, refund, damages), and a reasonable deadline for compliance. In many cases, this demand letter can trigger a settlement without court. 

    This step also demonstrates good faith — which courts may look on favorably — and preserves your right to claim damages later if breach continues. It may even be required under the contract’s dispute-resolution clause or local commercial norms. 

  2. Attempt negotiation or alternative dispute resolution (ADR)

    If the other party responds, try to negotiate or mediate the dispute. Settlement — whether performance, partial performance, compensation, or liquidated damages — often resolves issues more quickly, cheaply and amicably than litigation. Many disputes in practice end with negotiated settlement. 

    Using mediation or direct negotiation also helps preserve business relationships, reduce legal costs, and avoid lengthy court procedures — a practical benefit especially in cross-border or business contexts.

  3. If negotiation fails — prepare and file a lawsuit or contractual claim

    When negotiation or ADR fails, you may need to assert your rights through formal legal proceedings. Under Korean law, remedies include:

    • Demanding performance (if possible) — forcing the breaching party to deliver the promised performance.
    • Terminating / rescinding the contract (if breach is fundamental) — when the breach undermines the core purpose of the contract, the innocent party may be excused from further performance and may seek damages. 
    • Claiming damages — compensation for losses caused by breach. Under Korean law, once non-performance is proven, fault is generally presumed, so damages are more easily claimable. 

    Typical damages include loss of profit, costs incurred, diminution in value, or compensation for delays. 

  4. Consider tort claims if contract law alone is insufficient

    In some cases, especially when the breach also involves wrongful acts (fraud, misrepresentation, negligence beyond contractual promises), you might have both contract and tort grounds. Under Korean law, contract-based claims and tort-based claims can be pursued separately or simultaneously. 

    This dual approach can strengthen your position and potentially increase the scope of recoverable damages — for example, in cases of deceit, misrepresentation, or harm beyond contractual performance.

  5. Act promptly — pay attention to limitation periods

    Every right to claim performance or damages is subject to statutory deadlines under the Civil Code.

    Delaying too long — either in sending a demand letter or filing a claim — can result in losing legal rights. Acting swiftly improves your chances of success and preserves evidence while it remains intact.

Why this “structured” procedure is most effective

This step-by-step method combines flexibility and legal security. Starting with review and documentation keeps your ground solid. A demand letter or negotiation offers a chance for amicable settlement, lower cost and faster resolution. Litigation and damages claims remain available if those earlier steps fail — protecting your rights fully. And by retaining all evidence and being timely, you maximize your leverage. For foreigners or cross-border parties, this method helps you navigate not just legal formalities but also communication, translation, and practical realities.

Practical Tips When You Are a Foreigner or Cross-Border Party

  • Keep all contracts, correspondence and communications in written form; avoid relying solely on verbal assurances.
  • If needed, prepare bilingual versions or certified translations — especially for important evidence or contracts in Korean. This helps avoid misunderstandings when you proceed legally.
  • Engage a lawyer experienced in Korean contract law early — to review contract terms, assess risk, write demand letters or negotiate.
  • If contract involves international aspects (foreign company, foreign law, overseas performance), clarify jurisdiction, applicable law, enforceability before signing — and again when you react to breach.
  • Document everything — delays, additional costs, losses, communications, dates — to support a strong claim for damages or termination.

Conclusion

Contract breach is never easy to deal with — it threatens trust, finances, planning, and relationships. But by following a structured and legally sound procedure — reviewing contract, collecting evidence, demanding performance or compensation, negotiating, and, if needed, filing a legal claim — you can protect your rights effectively. This approach serves not only as protection, but also as a roadmap to restore fairness and certainty. If you find yourself facing a breach of contract, you don’t have to navigate alone — seeking professional legal advice can give clarity and strength. ✨

Disclaimer: This article provides general information only and does not constitute legal advice. For tailored guidance, please consult a qualified attorney experienced in contract disputes.

*Would you like to explore related guides on Commercial Contracts, Litigation Strategy, or International Contract Enforcement?*

(Updated: 2025 Legal Guide)