Before you file a lawsuit for breach of contract, check the contract and make sure it doesn't provide a particular method such as arbitration or mediation as the exclusive means of resolving any disputes.If your contract includes an alternate dispute resolution clause, or identifies arbitration as the sole means of resolving disputes under the contract, you must follow that clause rather than filing a lawsuit in court.
Your contract also will be important in determining whether the actions of the other party actually constitute breach of contract.
For example, you may be disappointed with the sales of the licensed product and believe the merchandiser has not effectively promoted it. However, unless the contract specified that the merchandiser make certain promotion efforts, the lack of promotion may not constitute breach of contract.
Your contract also may specify the types of damages you are entitled to recover if a court determines the other party breached the contract.;
, Based on your reading of the contract and what you know about the other party's conduct, you should be able to accurately assess whether his or her conduct constitutes a breach.Contract breaches typically are categorized as either "material" or "immaterial." A material breach is a failure to perform a required duty under the contract. An immaterial breach, however, typically has to do with more minor, technical details.
For example, if the other party refuses to pay you royalties for licensed products, and continues to sell them, that is an obvious material breach.
However, if the other party sends you a check the day after he or she was supposed to send it under the contract, that would more likely be an immaterial breach. The other party did perform, even if it was a day late.
Other breaches fall into a gray area of interpretation. For example, suppose you have a merchandising agreement for a merchandiser to manufacture and sell T-shirts with your logo on them, and he starts selling sweatshirts as well. Although sweatshirts aren't covered by the contract, they are still items of clothing. Many judges would interpret this as an immaterial breach.
However, if you had a substantial reason that you did not want him to make sweatshirts, it might be considered a material breach.
Likewise, if you discussed sweatshirts while negotiating the contract and you were adamant that you would not allow him to make sweatshirts, that would play into your argument that his breach was material because he went against your expressed wishes.
 If you're free to file a lawsuit, you need information and documentation about the actions of the other party so you can formulate the allegations in your complaint.In addition to the contract itself, you should have documents or other information about the particular incident that constitutes breach of contract.
You may not have access to all the information you need to prove your allegations until after you've filed your lawsuit and sent requests to the other party. However, you don't need to present any proof of your allegations at this stage – you just have to make them.
 Before you file a lawsuit, make an attempt to negotiate an early end of the agreement with the other party. It may be that the other party wants out of the agreement as much as you do, and making an effort to resolve the situation out of court could save you both significant time and money.Using a professional and even-handed tone, explain that you want to end the merchandising agreement and outline your reasons.
You also might want to include some basic information about the agreement itself or attach a copy for reference. This is especially important if the person to whom you're sending the letter is not the person who signed the original contract.
State want you want to happen. You want to end the agreement, but if the other party also owes you money you should mention this as well.
Give the other party a deadline to respond to the letter. You may want to let him or her know that you are prepared to file a breach of contract lawsuit if the contract is not terminated.
Send your letter using certified mail with returned receipt requested so you have a record of when it was received – do not simply send an email. Not only do you not have the same proof that an email was received, but an email may not be taken as seriously.
 Often contracts specify that a particular court is the chosen forum for any breach of contract actions. If your contract does not, you will have to find the court that has jurisdiction over the dispute and the parties.If your contract doesn't specify a court, typically the court located in the county where the party you want to sue is located will have jurisdiction.
You may want to file in that county's civil court, or in small claims court, depending on the amount of money you plan to claim in your lawsuit.
The maximum amount you can sue for in small claims court varies widely among states, and may be anywhere from $2,500 in states such as Rhode Island to $25,000 in states such as Tennessee.
If you're thinking about filing in small claims court, make sure you contact the small claims clerk or visit the court's website to find out the limit in your state.
 Particularly if the contract is an exclusive agreement, or involves significant sums of money, it may be in your best interest to hire an attorney rather than attempting to sue for breach of contract yourself.If you've decided to file your lawsuit in small claims, you generally don't need an attorney. In fact, attorneys are prohibited from representing clients in small claims courts in some states.
However, if your damages exceed small claims court limits and you're filing in state court, you may want an attorney to represent you.
Look for an attorney who has experience litigating breach of contract lawsuits that involve the licensing of intellectual property.
If you're concerned about your ability to pay extensive attorney's fees, find out what legal aid or nonprofit services are available in your state. For example, if you're an artist, you may be able to get free representation through your state or local chapter of Lawyers for the Arts.
Some attorneys also offer unbundled services, in which they draft court documents for you or help you with aspects of litigation that you aren't comfortable handling yourself, but don't represent you in the case as a whole.
 The complaint is the document that initiates your lawsuit, and identifies you and the other party to the court and lists the facts that you allege constitute breach of contract.If you're filing in small claims court, the court will have forms for you to fill out to begin your claim. Often you can download these forms from the court's website, but you may have to go to the clerk's office to pick up a paper form – particularly if the court is located in a smaller town or more rural area.
Some regular state courts have forms you can use as well. It's worth checking to see if a form is available in the court where you've chosen to file your lawsuit.
If you can't find a form, go to the clerk's office and ask for the copy of a complaint filed in another breach of contract suit in the same court.
You can use that complaint as a guide, particularly with regard to formatting, but be careful not to copy the allegations verbatim, because they don't apply to your case.
As far as your allegations are concerned, open by providing the basic facts about the contract, including the date it was signed and its purpose.
State the specific actions of the other party and explain how they constitute a breach of your contract. Finally, you must tell the court the damages to which you believe you are entitled as a result of the other party's breach.
 If the other party is continuing to manufacture, sell, or distribute merchandise including your intellectual property and you want this to stop pending a resolution of your breach of contract lawsuit, you can request the court issue a court order called an injunction which will prohibit the other party from continuing that activity.Keep in mind that since an injunction is considered equitable relief, it typically won't be available to you if you file your lawsuit in small claims court. Small claims courts typically only award monetary damages.
Whether to order an injunction is completely within the court's discretion, and involves balancing how likely the damage is to be repaired or recovered by monetary damages with the continuing harm done to you if the other party continues the action you're requesting the court to stop.
 When you've completed your complaint and any other documents required by the court, you must take them to the clerk's office and file them with the court.You may want to contact the clerk's office ahead of time and make sure you have all the documents or forms you need to initiate a lawsuit. You also can find out how much your filing fees will be and what forms of payment are accepted.
If you don't believe you can afford to pay the filing fee, ask the clerk for a waiver application. You must include information about your income and assets, and if they fall below a certain threshold the court will waive filing fees for you.
Make at least two copies of all your documents after you sign them, but before you go to the clerk's office. you will need the clerk to file-stamp both your originals and your copies.
The clerk will keep the originals for the court files and give your copies back to you. One copy will be for your records and the other you will have to deliver to the other party along with a summons.
After your complaint is filed, the clerk will assign it to a judge and give it a case number. That case number will be used on all other documents filed with the court in your case.
 The court has rules for proper service of process, which dictate the method and procedure you can use to have the complaint and summons delivered to the other party so he or she has proper legal notice of the lawsuit.You can't serve the papers yourself, but you can get anyone over the age of 18 who isn't involved in the case to deliver them to the other party for you.
Typically plaintiffs have a sheriff's deputy or professional process server serve the summons and complaint. Although you'll have to pay a small fee, this ensures service is completed properly and there are no mistakes.
After service is completed, the process server must complete a proof of service form for you to file with the court.
 After he or she receives your lawsuit, the other party has a specific period of time – typically between 20 and 30 days – to file a written response to your lawsuit or you can request a default judgment.The defendant must file his or her answer to your lawsuit with the court and have it served on you.
If the defendant doesn't file an answer at all, or misses the deadline, you may be eligible to get a default judgment from the court.
Another possibility is that the defendant will contact you and offer to settle the lawsuit out of court.
 Particularly if you requested a preliminary injunction, the judge may schedule a hearing far in advance of trial to hear from both parties and decide what to do in your case.If you requested a preliminary injunction, the judge typically will hold a hearing to hear from both sides before making a decision on whether to issue an order compelling the defendant to cease activities involving products licensed under the merchandising agreement.
Keep in mind that if you filed in small claims, you typically won't have any hearings prior to the trial. Small claims courts are designed to handle relatively simple cases, and pretrial litigation is significantly limited compared to state or federal court cases.
If you filed your lawsuit in state court, the judge typically will hold at least one scheduling conference to chart the course for litigation and set deadlines to keep the case moving.
 Through the discovery process, you and the other party have the opportunity to exchange documents and information related to your merchandising agreement and to the issues raised in your lawsuit.Part of the process is written discovery, which includes interrogatories which are written questions answered in writing under oath, and requests for production, which require the receiving party to produce various documents that may contain evidence to be used at trial.
Discovery also includes depositions, which allow you to interview parties and witnesses under oath in the presence of a court reporter. The court reporter produces a transcript of the proceedings for later use.
Depositions may be of limited use in a breach of contract case. However, you may wish to depose the other party concerning his or her actions and how they breached the contract.
 Through mediation, you may be able to negotiate a settlement to the dispute without going to trial. Some courts require parties to at least attempt mediation before a trial will be scheduled.Even if you don't feel comfortable negotiating a settlement directly with the other party, you may be able to come to a mutually agreeable resolution with the assistance of a mediator, who is trained to facilitate conversations between two parties and resolve disputes.
One benefit of mediation is the fact that the proceedings and terms of the ultimate agreement are confidential, which can avoid any negative publicity that might come with a public trial.
If you and the other party reach an agreement through mediation, you can sign a written document that makes that agreement legally binding on both of you.
 If you are unable to reach a settlement through mediation, you must begin organizing your evidence and witnesses and crafting your statements for trial.Even if you haven't had an attorney up to this point, if you are approaching a trial in state court and have been unable to reach a settlement, you probably want to seriously consider hiring an attorney to assist you.
Keep in mind that if you represent yourself at trial, you will be held to the same standards as an attorney would be, and will be expected to know all the court's rules of evidence and procedure.
Review your contract.
Analyze whether the other party actually breached the contract.
Gather information about the alleged breach.
Send a letter to the other party.
Determine what court you need to use.
Consider consulting an attorney.
Draft your complaint.
Consider including a request for an injunction.
File your complaint.
Have the other party served.
Receive the other party's answer.
Attend any preliminary hearings.
Conduct discovery.
Attempt mediation.
Prepare for trial.
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