DEAR HARRIETTE: I own a small restaurant, and I have a loose contract with one of my suppliers that I want to break. I call this a "loose contract" because we both signed it when we were closer friends and after a few beers. My restaurant isn't doing incredibly well, and there's a cheaper farm I want to start buying from.
The end to my contract is in three years. If I wait that long, I'll probably lose my business. I don't want to seem unprofessional, but I need to do what is best for my business. I've never had to break a contract before. I don't even know where to begin. I just want to talk this out with my supplier, but he's a bit of a hothead. I want this to end quickly. Should I start buying some of my produce from the cheaper supplier? I need to focus on cutting costs, and this contract is killing me while it's helping my friend keep business. -- Rotten Contract, Calvert County, Maryland
DEAR ROTTEN CONTRACT: Consult an attorney immediately. Have the contract reviewed to learn your legal rights. Speak to your accountant as well, to figure out where you stand with your finances. Some businesses file bankruptcy in order to free themselves from old debt and start anew. This can negatively affect your credit, but it could also give you a chance to stay in business. By incorporating another company, you may be able to create a contract with a different vendor. Should that be a consideration, you may want to speak to your potential new vendor in advance to begin to build a relationship. In that way, when the time comes -- and your credit is damaged -- the personal familiarity may help you.