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5 ways to avoid contract disputes

On Behalf of | Oct 4, 2023 | BUSINESS & COMMERCIAL LAW - Contract Disputes

In the business world, contracts are everything. A contract helps each involved party understand their obligations to uphold a transaction, delivery or service.

While contracts frequently define how businesses work with others, it doesn’t always mean each party is willing to follow every detail. As a result, many businesses face contract disputes. Here are a few things to keep in mind about disputes when planning out a contract: 

1. Trim down confusing language

One of the main issues with contracts that leads to disputes is ambiguous and vague language. If the language in a contract isn’t clear about its intentions, then each party’s responsibilities and rights can be interpreted differently. It can help to clarify each party’s expectations from a business transaction or relationship and what goals each party intends to achieve early on. Details and conditions in a contract shouldn’t be assumed, but instead clarified with questions and precise descriptions. 

2. Keep documents of everything

Everything should be documented when a contract is being made. Texts, emails and copies of contracts may help resolve disagreements. Each party should attempt to avoid any making agreements through handshake deals or off the record. 

3. Communicate constantly 

While the terms of a contract may be final once everything is decided and signed, it’s often not the end of a business relationship or transaction. Each party should consider staying in constant contact to ensure the terms of a contract are met and any issues are resolved early. 

4. Consider possible conflicts

Many businesses have had disputes in the past. By understanding how similar contract agreements resulted in disputes, businesses can avoid having issues with their agreements. 

5. Clarify how a dispute is resolved 

After discussing how a contract dispute may occur, it may help each party understand the potential repercussions that would help resolve conflicts. For example, by understanding that shipments can often be delayed, a clause in a contract may determine what would happen if a shipment delay causes sale losses. 

How a contract is resolved can work differently for many businesses. Businesses that understand their legal rights when creating contracts may be better equipped to handle disputes.