Leveraging Legal Insights to Optimize Revenue Operations: Understanding Breach of Construction Contracts
With the rising trend of marketing automation and the use of dynamic outcome-based lead management strategies, it’s important to remember the less glamorous side of business-the legal agreements signed to protect or seal the deal. And with any kind of legal agreement comes liability: If there’s a breach of construction contract, how will it affect a company’s bottom line? Will there be penalties and fines?
A construction contract is typically an agreement signed between a construction company and an entity or person looking to build or enhance a specific structure. This can be anything from building a new office building to adding on a family room addition in an existing home. In other words, it’s an agreement for the construction of a structure.
A breach of construction contract means that one of the involved parties has failed to comply with one or more terms of the contract. Potential causes of a breach include:
If a breach of contract occurs, the construction business could be looking at a decline in the operation of their revenue streams. While they are remedying the situation, dealing with lawsuits, etc., they aren’t earning money. In short, a breach of construction contract could have a serious impact on the bottom line of a construction company. In addition, reputations are tarnished, and a company’s history and trustworthiness could be called into question, making it difficult to win new contracts or the trust of new clients.
One way to safeguard a company against a breach of a construction contract-and any potential negative effects that would then follow-is to invest in marketing automation software. One element of this kind of software includes dynamic lead scoring, which can help determine which leads are most likely to close. As a result, the vast majority of sales efforts go toward those leads with the highest probability to close.
If, for instance, a lead establishes some kind of communication with a company representative, the software can log all emails sent or received between the two parties. Once a certain number of emails has been generated back and forth, or once a certain sentence or word pattern tends to develop, those pre-established milestones can be set as a trigger that puts the lead – now converted to a customer – into a sales cycle. These established techniques then prevent unwanted or unproductive situations, including a potential breach of contract.
Lead management mechanics are also important when it comes to creating a viable digital marketing campaign. This is a combination of a number of different techniques or processes to ensure that a lead – once acquired – converts to a paying customer. For example, automated emails can be sent to a prospect to nurture them and earn their trust. What you don’t want is for your email marketing to devolve into a pile of spam. In addition, a solid lead management process helps you continually upgrade data and reports on a lead’s behavior.
If done properly, lead management will target new customers and convert old or prospective customers who have already attempted to connect with you. It ensures bids are competitive and that communication with clients remains steady. Ultimately, this will help you to avoid a breach of contract.
Unambiguous, detailed, clear, and precise contract terms are the best ways to protect your business from contract breaches. In addition, make sure to put the contract in writing and ensure that both you and the client understand it. Talk to them about it and answer any questions before they sign, and follow up with them, too, in case any other questions pop up about it later. Finally, make sure to listen to what the customer is saying. If you see warning signs that a breach may occur, you may then have time to remedy the situation.
While litigation is never desirable-and neither is a breach of contract-clients tend to appreciate an open-dialogue approach involving whatever problems may have occurred in the project. The goal here is to be truly invested in the project, as well as the client. People can feel when a company is only looking out for themselves, so make sure you demonstrate how invested you are in seeing the project through until the end. Go above and beyond, be as accommodating as possible, and always maintain a professional demeanor. A breach of contract may not be avoidable, but a breach of trust is.
As mentioned previously, a breach of a construction contract can impact a company’s bottom line, especially if it goes to court. So, in addition to creating sound contract terms, you could spend time analyzing data and using analytics as a predictive tool when it comes to breaches of contract. Legal software has become increasingly sophisticated, including predictive modeling tools that use various analytics to forecast outcomes of disputes. When used correctly, this kind of analytics can spot early warning signs that could help you to prevent a breach.
Educating your teams on the best practices related to managing contracts is also postulated as a way of helping to prevent breaches of contract, as employees will better understand the importance of the agreements and why it’s crucial to ensure they are followed.
Finally, you should have a checklist in place to ensure the integrity of contracts while also optimizing revenue operations. Key points to remember include being mindful of pricing, changes that are requested by clients, and how to engage with them to verify that they understand the contract terms.
For more information on contract law, you can visit Wikipedia’s page on Contract Law.
