Settling Business Contract Disputes
Contracts are the foundation for conducting business in our nation. Companies rely on their contractual partners to honor the terms of their contract. When a company fails to do so, a breach of contract occurs. When that happens, innocent companies can incur significant financial losses.
Financial problems, delays in delivering a service, questions over product quality or poor workmanship and other unexpected events can cause a breach of contract, as can vague language that doesn’t clearly spell out each party’s roles and responsibilities.
If you have been the victim of a breach of contract, you likely need an experienced lawyer to help you understand your rights and to recommend proper courses of action to ensure your interests are protected. So, how can you resolve most contract disputes quickly?
Read the Fine Print. Don’t sign any contract without reviewing all its language. An attorney with contract law experience can be helpful. You and your attorney can identify any potential problem areas and address them before the contract is signed. What are your company’s obligations? Are the timelines for fulfilling them reasonable and doable?
Negotiation. Once a breach has occurred, communicate with the other party before taking legal action. You can identify what you believe to be a breach and listen for your partner’s response. Some disputes are nothing more than misunderstandings and can be handled outside the formal legal process.
Mediation. More structured than negotiation, this involves bringing in an independent third-party (mediator), who can help both parties identify the problems and reach a solution. Typically, mediation agreements are non-binding but, if necessary and agreed to by both parties, they can be placed into more formal documents and signed by both parties.
Arbitration. Under mediation, both contractual parties maintain control of the process. Under arbitration, both parties surrender their control and allow a third party (a panel of arbitrators) to come up with a final solution. In most cases, the arbitrator’s ruling is final and there are limited chances to appeal.
Litigation. When all else fails, you can take your partner to court. The mostly costly and perhaps the riskiest of the solutions, this should be viewed as a last resort. It’s a public process that could jeopardize your company’s reputation and can end up costing your firm thousands of dollars in legal fees with no guarantees of success.