What a breach of contract involves
A breach of contract happens where one party to a contract fails to fulfil its obligations. Often this results in financial harm to the other party. Examples of a breach of contract includes failure to provide products or services in line with the contract, providing defective or substandard goods, late delivery, failure to complete projects and overdue payment or non-payment of amounts due. Breaches may also arise in respect of confidentiality provisions or misuse of data or information. Disputes may also arise around wrongful termination of contracts.
How forensic accountants assess the damage
A forensic accountant can help identify and quantify the losses arising from such breaches, which is a legal matter. They will use their skills and expertise to understand how a business has been affected by the breach, and in particular on the profits made / losses suffered by the business as a consequence. They will then consider the profits that would have been made “but for” the breach and so establish loss. As part of this, the forensic accountant will help identify what information and evidence will be needed to show how losses have arisen and the amount of those losses.
Forensic accountants can then prepare reports on loss, to help in any recovery or alternative dispute resolution. This may include reporting as an expert witness in a court or arbitral proceeding.
