Avoiding Contract Disputes
by Danny Brown on February 11th, 2008
One of the hardest things to deal with in any business is a contract. Because they can be so intensive down to the minutest of details, more often than not they can result in contract disputes. Yet often it can also be the simplest of things that can lead to a contract dispute - that simple disagreement can lead to a costly court case and damages for the “hurt” party. So how can you avoid these disputes? Unfortunately, sometimes it’s easier said than done, but there are ways you can limit the potential of a contract dispute.
Don’t Go By Verbal Agreements
One of the biggest mistakes people make when coming to an agreement on contracts is going by what’s suggested verbally throughout the negotiation period. This is a common mistake, and one that many people make. Just because you’ve agreed in principle what both parties would like, it’s not worth anything legally until written down and signed for. If you do wish to make the early verbal discussions more binding, take notes and initial them as you agree on things - this can make a huge difference further down the line.
Keep It Simple
Whenever people mention contracts, they always automatically assume that it needs to be minute and detailed. While this can be true for many contracts, it doesn’t always have to be. Indeed, some of the best contracts around are also the simplest - after all, the more that something has, the more can go wrong with it. If there are areas of the contract that need to be more intense - usually the financial aspects - then make sure that both parties agree to any changes to how things are written. To be completely safe and protect yourself, you should always agree to have a contract put together with the help of a lawyer or similar. This will help avoid any confusion or disagreement later on.
Know The Terms
As mentioned earlier, one of the biggest areas for contract disputes is when it comes to the financial details. This is why it’s so important to have everything agreed upon and locked down; yet you need to make sure that you’ve agreed on the right thing - the last thing you want to do in a sale, for example, is lose money unnecessarily. You’d be surprised how many people get net and gross confused, and that can make a huge difference when it comes to any deal. So make sure you’re agreeing to the right financial terms.
Dealing With Contract Disputes
Despite your best efforts and intentions, there will always come a time when you need to deal with a contract dispute. If this is the case, there are a few options available to you. Firstly, always try and resolve with the other party. If this can’t be done amicably, you’ll then need to involve outside help. Before you go to your lawyers, try an arbitration or mediation service first. You can find these in your local business directory, or online. The Better Business Bureau is another option. If all this fails, then unfortunately you will have to involve your lawyers, but at least you’ll know you tried all other options first.