Contract Disputes
How do you avoid a contractual dispute?
A contractual dispute arises when one of the parties involved in a contract fails to meet/adhere to the terms of the agreement. It may be that goods or services haven’t been paid for, that goods or services have been delivered late, that work has been completed outside the agreed timeframe, or that workmanship has proved defective.
A contractual dispute can have a huge impact on a business and can cause financial loss, damage a business’ reputation, cost a business clients or suppliers or critically disrupt performance and productivity.
If it results in legal action, it can also end up costing the business a great deal in legal costs not to mention time, effort and attention as a resolution is sought.
With so much at stake, it is always better for a business to do what it can to insulate itself against contractual disputes.
How can a business protect itself against contractual disputes?
While contractual disputes can arise for a multitude of reasons, there are some general steps a business can take to protect itself against them:
- Ensure your contracts are clear and well-drafted with clearly defined terms and clauses. Also, ensure as far as you are able, that your standard terms are incorporated into any contracts with third parties.
- Consider including dispute resolution clauses outlining your preferred methods for resolving disputes, for example mediation or arbitration.
- Include a force majeure clause in all contracts. This offers protection against unforeseen events like natural disasters, wars, pandemics or ‘acts of god’ as long as what constitutes such events is clearly defined.
- Reduce reliance on third parties; third parties are more likely to fail to meet deadlines or quality standards.
- Comply with local laws. If you’re trading across jurisdictions, make sure all contracts comply with the relevant jurisdictions’ laws.
- Establish and maintain open communication with all the other parties you contract with so that you can address any concerns and deal with potential issues before they escalate into a dispute.
And finally, always seek legal advice as soon as you think a significant contract dispute has or might occur. The faster you act, the more chance there will be to try to resolve matters amicably and to your advantage.
If you think you are at risk of becoming involved in a contractual dispute, please contact our litigation team today.
