Investigation of breach: Overview, definition, and example
What is investigation of breach?
Investigation of breach refers to the process of examining and gathering information about a suspected or actual violation of a contract, law, or policy. It’s how a company, regulator, or legal team figures out what went wrong, who was responsible, and what the consequences might be.
In simple terms, it means looking into whether someone broke the rules—and how.
Why is investigation of breach important?
When a potential breach occurs—like missed payments, data leaks, or failure to meet agreed terms—an investigation of breach helps determine the facts. This is essential before taking any next steps, such as:
- Enforcing penalties
- Filing a lawsuit
- Terminating a contract
- Notifying regulators or affected parties
For SMBs, it’s also a way to protect your business. Rushing to accuse or act without proper investigation can lead to legal trouble, damaged relationships, or unnecessary costs.
A solid investigation process also shows you’ve acted fairly and responsibly—especially if you need to defend your decisions later.
Understanding investigation of breach through an example
Let’s say you hired a vendor to deliver equipment by March 1, but the shipment still hasn’t arrived by March 10. Before jumping to conclusions, your team starts an investigation of breach to check:
- Was there a delay on your end (like late payment or missing info)?
- Did the vendor provide notice of a delay?
- Were there external issues (like supply chain problems)?
- Is the delay considered a “material breach” under the contract?
Once you gather all the facts, you can decide whether to enforce the breach clause, renegotiate, or allow more time.
An example of an investigation of breach clause
Here’s how an investigation of breach clause might appear in a service or supply agreement:
“In the event of a suspected breach of this Agreement, the non-breaching party shall have the right to initiate an investigation of breach. The breaching party agrees to cooperate fully, provide requested documentation, and respond promptly to inquiries. No enforcement action shall be taken until the investigation is complete, except in cases of material or irreparable harm.”
Conclusion
Investigation of breach is a smart and necessary step when something goes wrong in a business relationship. It ensures decisions are based on facts—not assumptions—and helps protect your business legally and financially.
Before taking action on a suspected breach, take the time to investigate. It could save you time, money, and unnecessary conflict—and lead to a more fair and informed outcome.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.