When it comes to doing business, most businesses couldn't perform without the use of, or partnership with, other businesses. In theory, being is business is just as much about your customers as it is about the vendors you are engaged in business with. This is why it's so important to set up business relationships for success from the beginning. One way in which to do that is to set up a contract between businesses.
A contract is an agreement that both parties engage in which details the expectations and responsibilities of each party. A good contract will also consider stipulations in which breach of contract is committed by one or both parties. Breach of contract could come in many forms, including nonperformance by one or both parties. A contract can help to determine how a party can be held accountable and by what means.
To enter into a business contract with any party is to take some sort of risk. This is because, even with best intentions, that a business will not certainly perform any action per the contract. In short, there is no guarantee that a business will perform as planned or expected. For this, ensure a contract is in place to serve as a fair and realistic recourse.
Any legitimate business never intends to non-perform in a contractual agreement. However, there isn't a crystal ball to predict the future. The breach of contract of a third party, connected to one of the parties, could go awry and cause a ripple effect in the next business contract. The hope is to avoid all of the above scenarios, to hope for the best and to prepare for the worst.