Contract Breach and Termination in Bogotá

Suing is not the first step

When a relationship breaks down the instinct is to call a lawyer and sue. It is almost always premature. Court or arbitration costs money, takes time and is won on evidence, not on indignation. Two things come first: establishing precisely what was breached, and using what the contract already provides to press for performance or to exit on good terms.

What you do in the first weeks also shapes everything that follows. A badly drafted communication can read as acceptance of the breach, as a waiver of a clause, or even as a breach of your own.

Diagnosing the breach

1. What the contract says. Which obligation was breached, how it was defined and what remedies were agreed for that case.
2. What actually happened. Parties often amend a contract in fact, through emails and practice, and that carries weight. We review emails, orders, minutes and invoicing.
3. What evidence exists. What can be proved today and what still has to be documented before it is lost.
4. Your own exposure. Before claiming, you need to know whether the counterparty has something to hold against you, because that sets the real strength of the position.
5. What you want. Collecting payment, forcing performance and getting out of the contract are three different goals with three different routes.

The tools the contract already gave you

• Formal demand and notice of default. The communication that fixes your position in writing, triggers interest and prepares the ground.
• Penalty clause. When it can be claimed, how it is quantified and how it interacts with damages.
• Guarantees. Enforcement of bonds, sureties, letters of credit or security interests before the counterparty's assets deteriorate.
• Suspending your own performance. When you can stop performing without falling into breach yourself, one of the most delicate decisions in the process.
• Termination. Exercising the agreed grounds with the notice and formalities the contract requires, so that the exit does not become the new problem.

When what you want is out

Ending a contract early is not always a right. It depends on what was agreed and on the reason: some contracts allow termination for convenience with notice, others only for breach, and certain contract types carry rules under the Commercial Code that the parties cannot set aside. We review the text and how the contract was actually performed before recommending an exit, and where the clean route is to negotiate, we negotiate.

• Termination agreements with mutual releases and a closing of accounts.
• Settlements and payment plans with acknowledgement of debt.
• Handling of inventory, advance payments, live guarantees and surviving obligations such as confidentiality and non-compete.
• Communication with customers and suppliers so that the termination does not drag other relationships with it.

When it has to escalate

If the counterparty does not respond, or the disagreement is substantive, the matter moves to a claim. We prepare the file and coordinate with our Litigation and Arbitration practices according to what the dispute resolution clause says. The advantage of having worked the earlier stages properly is that the case arrives with the evidence in order and the client's position already fixed in writing.

What you receive

• A written diagnosis of the breach, with the options and the risk attached to each.
• The communications drafted and ready to send, with a record of their dispatch.
• The termination or payment agreement, if the matter closes by negotiation.
• An organised file and a defined procedural route, if it has to escalate.