Your Alternatives When You Face a Business Contract Dispute
Business contracts help protect you in the event of a dispute. Disagreements still do need legal expertise to sort out, however. This article looks at how disputes tend to arise, and at the kinds of alternatives open to you as a business owner.
Business relationships are formed on a foundation provided by contracts. These contracts, at times, become subject to disputes. When your business faces a disagreement involving a business contract, you need to know what your options are, and what you can do to ensure a just resolution.
A quick primer on contract disputes
Contract disputes occur most often as a result of breach of contract — when one party to a contract doesn’t keep up their end of the bargain; they may neglect to pay on time, for example. Disputes can also occur when one party questions the fairness of a contract, when they challenge the way technical terms in a contract are defined, when they point to potential mistakes in the document, or when they allege coercion.
While creating a written contract and ensuring that everyone understands it is the best way to sidestep disputes, it’s also a good idea to include a dispute resolution clause in every contract. Such a clause sets out the methods by which disputes, should they occur, are to be resolved.
If you are already involved in a contract dispute, there a few steps that you should take.
Decide on the kind of outcome you hope for
Different outcomes may be desirable, depending on the circumstances of your case. You may want the other party to fulfill their contractual obligations, you may want to renegotiate because you believe you were misled, or you may want to exit a contract altogether because you believe its terms are unfair.
Making sure you are clear about what kind of outcome would satisfy you could help you focus on obtaining the best possible resolution.
Go over the contract one more time
You may have read your contract before; nevertheless, it’s usually a good idea to refresh your memory, and make sure that your take on the facts of the dispute is accurate. If the contract seems ambiguous, especially when viewed in light of the knowledge that you have of the dispute that you face, a business law attorney should be able to help you determine how enforceable the contract is.
Be sure to document every relevant occurrence
When you face a potential contractual dispute, it helps to possess records that back up your position. It’s a good idea to go back as far as necessary, and to compile a detailed record of every communication and transaction that you’ve had with the other party. You may need to go over old emails, bank transactions and meetings, and record dates, times, and subject matter.
Whatever method you may choose to move forward, it’s important to do everything in your power to build a strong case. If the other party is in breach of a contract, a complete record should help create a clear picture of where exactly they were wrong.
Contact an attorney
You may not be interested in filing a lawsuit in court, but it would still make sense to discuss your situation with a business lawyer. An attorney with experience in business contract disputes could help you understand the rights of each party involved, your alternatives, and the relative strengths and weaknesses of each alternative.
Decide on how to move forward
Your business lawyer should be able to help you weigh the alternative of litigation against mediation for your specific case. Minor disputes are usually settled without litigation. You may go with either option depending on the strength of your case, the sum of money involved, and the need you feel to preserve your business relationship with the other party.
Contractual disputes in business can be an unwelcome interruption, but it’s possible to steer a smooth course when you have an experienced lawyer with specialized expertise on your side.