1000+
customers

50+ countries
across the world

Outsourcing leader
since 2008

Technology-driven
services

Stringent
quality processes

Avoid Business Contract Disputes with these Expert Tips!

Last updated: 30 Apr, 2021 By | 6 Minutes Read

Contract disputes are common in any industry and any part of the world. A business needs to sign a professional contract when starting to work with someone on specific terms and conditions. It is one of the best ways to avoid any dispute in the future. Let’s see what our industry experts have to say on this.

1. Chantay Bridges, Sr. Real Estate Specialist At Los Angeles Real Estate Now

There are times for varying reasons why we decide to agree on items verbally; maybe it’s because we are doing business with a friend, relative or someone we trust. We may forego putting it in writing due to time or other constraints, yet whatever the reason, you want to avoid verbal-only contracts.

Always, always, always, no matter what the circumstances or whom it is, write it down, even if it’s handwritten on a paper towel. Each party sign and date it.

1. Make it Plan

Don’t leave certain parts of the agreement un-clear or a topic to be decided at a later date. Make it plain, agree to agree on all parts now and consider amendment later if warranted. What one party may understand to be the agreement, the other party may have a whole other take, in lieu of playing guessing games, it’s imperative to spell it out. Be certain everyone is on the same page, has the same understanding and agrees with the contractual terms.

2. Get a Witness

It doesn’t hurt to have other witnesses there when the agreement is drafted. If ever there is a dispute later, there will be someone who can verify what they witnessed as the agreement was being signed. In addition, having it notarized sure would not hurt. Whether the witness is a co-worker, intern or stranger, have someone be there as an independent third party.

3. Don’t Throw it Away

I know you are organizing, de-cluttering and attempting to clean your office, but you never know when that written contract may be needed. Your computer could crash and you lose everything on your hard drive, don’t take a chance not having a copy on hand. You want to always keep business contractual files for multi-purposes. Throw those old recipes away but hang on to this.

2. Eric J. Proos, Esq Own Law Firm, The Law Office of Eric J. Proos, P.C.

His insight includes 4 tips:

1. The two parties should be very careful when drafting the contract. Most companies believe one contract fits all, but that is not the case.

2. Companies should take the time to consider possible situations they may find themselves in, or consult with lawyers to help with this aspect.

However, if careful drafting does not count as a tip, another one is to look for an alternative to the breach, or breaking of the contract. This will avoid all disputes and keep the two parties in each other’s good graces.

Keep the lines of communications open between the parties, and always have contract management processes in place.

3. Reuben Yonatan, Founder and CEO of Get VoIP

For contracts, it’s really easy to simply sign a vendor’s contract as a way to get things moving. But any time an outside part has prepared legal documents, you can be sure those agreements are written to protect the other party in every possible way.

Have your own lawyer review any contract before you sign it. This almost always leads to adjustments or rephrasing that can protect you if something goes wrong, especially with longer-term arrangements.

Yes, it slows things down, and that’s frustrating. But it’s better than getting stuck in a contract that costs you time, money, and far more frustration down the road.

4. Mark Wood, Owner at National Pool Fences

The Best Practical Tips for Avoiding Business Contract Disputes:

My business relies heavily on what is written on the contract. And for that, I make it a point to make details clear, transparent, and direct to the point. Here are my tips to avoid nasty and headache-inducing disputes:

1. Always have contracts notarized no matter what.
2. Perform due diligence and take your time to avoid eventual litigation.
3. Be clear on what provisions to write for termination of the contract, such as an early termination provision.
4. Clients prefer reading a clear level of quality expected from the product or service provider. In our case, we write what quality they should expect from the installation we make.
5. Ensure the deadline for product delivery or service delivery.
6. Always anticipate the roadblocks that may put you and your potential business partner in messy litigation. This will help you reduce your financial setbacks in the long-term.

5. Devin Miller, Founder, CEO and Managing Partner at Miller IP Law

As a patent and trademark law firm, we help small businesses and startups protect their ideas, products, and brands. Most disputes that arise from business contracts are based on a difference in understanding *of what each party meant when entering into the agreement.

Very often, *people don’t want to read* a lengthy or legalistic document as they are excited to get going with the business opportunity.

Each party *verbally communicates a lot of intentions and goals* of the business opportunity that never gets adequately captured or fleshed out in the business agreements. Because the *intentions and goals are not adequately captured in the business agreements*, the details of the business opportunity are not captured.

Exacerbating the issue is the fact that *everyone’s recollections change over time*, and so what was originally intended by everyone entering the business agreement may not match their current recollection.

In order *to avoid many of the business contract disputes*, the best practice is to spend the necessary time upfront to *capture all the details in the agreement.* When disputes arise, you then have the details of the business arrangement and the agreement in writing, and you aren’t forced to rely on memories and vague agreements.

6. Andrew Legrand, Business Attorney at Spera Law Group, LLC

The purpose of a contract is to help parties set expectations of their relationship. Typical discoveries; who’s doing what, and how they will be paid for it? Of course, contracts can include hundreds of different types of clauses.

In my experience as a small business attorney, contract disputes typically arise because the parties have not created a very good contract, and have failed to address foreseeable situations in writing. When two different parties start working together and a situation arises that they hadn’t planned for, it’s not uncommon that one party wants to handle it in one way, and another party wants to handle it another way.

When those situations arise, and the expectations are different, a contract dispute occurs. The best way to avoid contract disputes is to attempt to foresee all possible outcomes and situations that could result due to the relationship between the parties. By pre-planning for all these contract disputes and attempting to make the expectations and relationship as unambiguous as possible, parties can avoid contract disputes.

Finally, resolving contract disputes is always more expensive than drafting the contract the right way the first time. Very often, clients hire our firm to resolve disputes, and it costs them thousands or tens of thousands of dollars to resolve.

Hence, pre-planning could be done ahead of time. If the cost of pre-planning with the professional is not worth it, then the parties need to consider whether or not they want to be involved in that relationship at all.

7. Leonard Ang, CMO for AQVA

Being able to prepare for unwanted contract disputes may save you a lot of time and money. These strategies will help you in planning and documenting your efforts.

1. Put everything into writing

It may seem as too over the top at first, but putting everything in writing will save you in the future, and by everything I mean EVERYTHING.

You must be able to state your terms as clear and as accurate so as to avoid any misunderstanding and any loopholes. You must be able to communicate with the other party and make sure they understand and agree with whatever was written. You should also ask yourself questions about the future to ensure that whatever may possibly happen is covered by the contract.

2. Get it notarized

Having your contract notarized will make sure that it is legally enforceable. Aside from this, signees are prompted to thoroughly read the contract before it gets officially notarized. If ever there is a court case, your signee won’t be able to claim that they did not sign the document.

3. Verify your contracting party

Before anything else, you have to make sure that your contractor is trustworthy and you have to check to see if they are who they say they are.

Lastly, make sure to keep a copy of your contract. The last thing you want to happen is losing it and not having anything to back you up in the future.

8. Bradley Stevens, Founder of LLC Formations

Contract disputes take time to resolve or settle. If it prolongs for months and years, it can turn to a great mess as well as it takes a lot of your money. You can either avoid the contract dispute with clear arguments on the spot or implement the following strategies to avoid severe situations.

1. Account for future facts

Contract disputes are very tricky to handle, and without the true facts and figures, you cannot win the argument even if you are right. Despite relaxing, ask yourself questions whose answers can be helpful to you in the future. Negotiate the facts and figures with yourself or consult any best lawyer to know what could be the possible results.

Make sure that you know the terms and conditions of the contract so that it stays helpful to protect your negotiation in the court.

2. Legalize your all documents

Make sure that the contract is legally enforceable. Getting the documents signed is a responsible job, but you can ask the services from the experts. The legal documents have benefits like a signed contract means that the contract is legal officially, and if the case proceeds in the court, the other party cannot claim anything contradictory to the contract.

3. Account for the complete contract cost

Costs and payments are the most common reasons to contract disputes. It is best to negotiate the budget and the profit-sharing before jumping into the project. With the fact that unexpected costs can arise, try the best to account for all variables and announce the estimated budget and get it signed by every party so no one can argue for compensation in the future.

Conclusion

This concludes the fact that disputes can actually be avoided if a business meets all the legal requirements of signing a contract and lay down the terms and conditions in it after discussing the same with the other party.


    In case of a legal firm, handling a plethora of contracts and managing them can be overwhelming owing to renewals and multiple changes in the terms and conditions. So, is there a solution to address this problem of law firms?

    Yes, by seeking help from outsourcing experts of contract management services, law firms can reduce their back-office workload and instead focus on scalability and business growth. Is your law firm struggling to deal with multiple contracts at the same time? If yes, you need not worry as the expert legal team of Cogneesol is there to support you.

    Get in touch to start your 14-day free trial today itself!

    Latest Blogs

    How Insurance Backoffice Providers Help Insurers Bridge Talent Gap
    Read More
    blog-img

    Biggest Legal Profession Challenges in 2022

    Read More
    blog-img

    10 Money-Wasting Business Accounting Mistakes You Must Avoid

    Read More
    blog-img

    Real Estate Accounting – Common Mistakes to Avoid

    Read More
    blog-img

    How Outsourcing Can Upgrade your Insurance Business Virtues?

    Read More
    blog-img

    Insurance BPO: The New Imperative for Insurance Companies

    Read More