Credit agreements may include provisions allowing borrowers to refinance or restructure the loan, such as benefiting from lower interest rates or extending the repayment period. If the lender objects to a refinancing or restructuring that should be allowed under the agreement, this is a breach of contract. A breach can also occur when the lender does not sufficiently disclose changes to the credit terms, even if those changes are permitted by contract. An example would be changing the interest rate of a variable rate loan. The lender may have the right to increase the interest rate, but the contract normally requires it to notify the borrower in advance. Courts and formal infringement actions are not the only options for individuals and companies involved in contractual disputes. This is an example of what economists call Kaldor Hicks efficiency; If the gains for the winner of the offence outweigh the losses for the loser, the company as a whole may be better placed by breach of contract. It is not uncommon for those involved in negotiating a contract to be different from the individuals or teams responsible for execution. A thorough transfer process will help ensure that each of you meets their commitments. In the event of a dispute over a treaty and informal attempts at a solution fail, the most common next step is legal action.
If the disputed amount is less than a dollar value (normally $3,000 to $7,500 depending on the state), the parties may eventually resolve the issue in small claims court. . . .