Sales Contract Breach Policy

Sales Contract Breach Policy

I. Introduction

This Contract Breach Policy ("Policy") is established by [Your Company Name], hereinafter referred to as "the Company," to outline the procedures and consequences associated with the breach of sales contracts and agreements by employees, clients, or any other parties involved. The objective of this policy is to ensure the fair and consistent treatment of all parties in the event of a contract breach.

II. Definitions

  • Contract Breach: A contract breach refers to a failure to comply with the terms and conditions outlined in a valid sales contract or agreement.

  • Non-Compliant Party: The party responsible for breaching the sales contract or agreement, including employees, clients, or any other relevant party.

III. Reporting a Contract Breach

In the event a breach of contract is discovered, it is imperative for any party involved in the contractual agreement to take immediate actions. The initial step involves offering prompt notification to crucial departments like the Sales Operations Department or the Legal Department. This notification should be put in writing as a formal indication of the situation at hand. Within this written notification, there must be a comprehensive description of the breach, clearly detailing what the breach entails and how it has occurred. Additionally, the notification should also incorporate relevant specifics about the contract. This includes items such as the terms of the agreement, the parties involved, date of signing, and so forth. Lastly, to offer a more in-depth context and understanding of the situation, it is advisable to include any supporting documentation related to the breach. Such documentation can serve as substantial evidence in highlighting the violation of contract terms.

IV. Review Process

Initial Assessment

The Sales Operations Department or Legal Department will conduct an initial assessment of the reported breach to determine its validity.

This assessment will include:

  • Review of the contract terms and conditions.

  • Gathering of relevant evidence.

  • Consultation with involved parties.

  • Evaluation of potential damages and consequences.


In instances where it seems that the breach of a contract is unintentional or may have occurred due to a misunderstanding, the Company holds the right to begin a mediation process between the concerned parties with an objective to clarify the misunderstandings and settle the issue at hand. This step is implemented with a view to preemptively stop any further breaches of the contract that could potentially occur in the future. Where it becomes mandatory, the mediation procedures will be overseen and conducted by a third party person. This person will hold no biases towards any of the involved parties and will operate in a completely unbiased and neutral manner.


In the event that efforts towards mediation do not yield the desired resolution, or in cases where a detected breach is deemed to have been committed deliberately, the Company is committed to escalating the issue. It will then be reviewed at the appropriate level of management along with consultation from legal counsel. Additionally, should circumstances require, the Company is prepared to engage in legal proceedings as a means of safeguarding its interests.

V. Consequences of Contract Breach

Employee Consequences

If an employee of the Company is found to be the non-compliant party:

  • Disciplinary actions may be taken, depending on the severity of the breach.

  • Employment termination may be considered in cases of serious or repeated breaches.

Client or Third-Party Consequences

If a client or third party is found to be the non-compliant party:

  • Legal action may be pursued to enforce the terms of the contract, including seeking damages.

  • Future business relationships may be reevaluated, including termination of the contract, loss of business opportunities, or other appropriate measures.

VI. Confidentiality

The treatment of all information related to breaches of contract will be of the utmost confidentiality. This measure ensures the preservation of the privacy and reputation of all parties and individuals involved in such instances. It is our primary concern that these elements are safeguarded in order to maintain trust and respect in all engagements.

VII. Policy Review

The given Policy is to be regularly scrutinized and modified by the Legal Department, as needed, to secure its efficiency and conformance with the legal norms and industry standards. If there are any adjustments made to the Policy, it will be thoroughly communicated to all associated parties involved ensuring no lapse in transparency and understanding.

VIII. Conclusion

This Contract Breach Policy is designed to protect the interests of [Your Company Name] and ensure fair and consistent treatment in the event of a contract breach. All parties involved in the Company's sales contracts and agreements are expected to adhere to the terms and conditions outlined therein. Failure to do so will result in appropriate actions and consequences as outlined in this Policy.

Prepared By: [Your Name], [Your Job Title]

Date: [Month, Day, Year]

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