How to avoid a contract dispute

There is no doubt that business relationships go through a lot. However, most manage to remain fairly amicable. In terms of wasted time and cost, a contract dispute is a problem that most of us want to avoid. No matter how much pressure there is on your business there are ways to make sure that you keep disagreements short and sweet.

Start with solid documents

The point of contracts is to set out what the relationship between the parties is and – as far as possible – to cover off most eventualities. Clear contracts that have been specifically drafted will go a long way towards preventing relationships deteriorating into a dispute. Many business owners will simply sign documents to get an important relationship under way. However, negotiating those documents with the help of a skilled professional advisor can help to minimise costs and confrontations further down the line.

Be prepared for disputes to arise

Interestingly, one of the most effective ways to avoid a contract dispute is to be prepared for it. If you have thought through the process and this is reflected in the contracts then it’s much easier to approach a potential dispute with less of an emotional context. You will be able to make a judgment about whether the dispute is worth pursuing and have the advantage of understanding the steps that are likely to be involved

Partner with an effective legal team

While this may seem like an unnecessary expense when relations are good, the reality is that the presence of legal advisors – and the help they provide – is often one of the main reasons that issues with a contract don’t make it into serious disputes territory. Not only can legal advice help clear up contractual issues before they become really contentious, but it is essential for the documentation drafting stage and provides the kind of impartiality that keeps conflicts from simmering over into a full blown dispute.

Make sure the arrangement reflects your interests

One of the reasons why legal advice is so important is to ensure that any documentation you’re going to sign genuinely reflects what you want from the relationship. Contracts that have been professionally drafted achieve this and can also include steps for de-escalating conflicts over the potentially problematic points. Disputes often arise because one of the parties doesn’t feel their contractual expectations are being met and you can ensure that isn’t you by taking advice on the drafting.

Sometimes the dispute is inevitable

If you find yourself in a situation where your business interests can only be protected by engaging in the dispute then it may be necessary to go forward. Watertight documents help to keep parties on the straight and narrow and will set out the steps for trying to resolve disputes – usually mediation or arbitration before anything makes it to court. It’s important to take a commercial view on the arguments, in addition to looking at what the contracts say – if preserving the relationship is important then sticking to the letter of the documents may be less so. Where dispute resolution fails and litigation is on the horizon, an effective legal team that understands your business, as well as the documents involved, is essential.

To discuss a contract or commercial dispute please call 01772 253841 or click here to contact us.