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Why Contractual Disputes Happen and What You Can Do About Them

Burgoyne Law Offices Nov. 18, 2021

A contract plays a crucial role in the day-to-day running of most businesses. At a fundamental level, a contract is an agreement, whether verbal or written, between two or more parties that outline the rights and responsibilities of each party in the contract.

Problems concerning the terms of the contract can occur from time to time, resulting in contractual disputes. Some of these disputes can be lengthy and may prove to be costly if they are not appropriately addressed. This is why it is important that you have an understanding of why contractual disputes happen and what you can do to prevent them in the first place.

Here are some of the most common causes of contractual disputes as well as possible remedies

Lack of Contingency Clauses

A good contract should come with contingency clauses. These clauses outline what happens to the contract should any problems or emergencies occur. Contingency clauses are particularly common in construction contracts where they serve to protect the contractor in the event of a natural disaster or bankruptcy.

Poorly-Defined Terms

Poorly-defined terms have the potential to sink a contract before its implementation. It is important that the parties to the contract come up with clearly defined terms. This gives both parties a clear understanding of what each party is bringing to the table.

Some tips that can help prevent contractual disputes from happening in the first place include:

  • Being clear about your terms from the onset

  • having both parties actively participate in the drafting of an agreement

  • Each party giving reasonable notice if they want an amendment to the contract

As a business owner, the chances are that you will deal with different kinds of contracts. Having a watertight contract comes with many benefits. One of these is that it will minimize your chances of having a contract dispute.