A contract dispute can flip the script on a business. It can lead to contentious litigation that results in court-ordered damages that are financially devastating, as well as irreparable harm to a business’s reputation. Although it is not always the case, sometimes it is difficult for a business to recover from a breach of contract case.
This is why it is imperative that businesses create ironclad contracts and agree to contracts that are clear and understandable. The starting point in this process is fully understanding some of the basic terms of a contract so that they can be clearly and thoroughly addressed.
Perhaps the most obvious, yet frequently litigated terms, are those pertaining to the parties’ duties. Very little wiggle room should be left here. Each party’s obligations need to be as clear as possible, including timeframes within which the obligations must be completed. The amount of compensation or type of performance must also be clearly delineated.
If the parties are endowed with certain rights, such as a right of first refusal, then those terms should be written into the contract in a way that leaves no room for interpretation.
Some basic contract terms are left out of business agreements, leaving the matter open to dispute later on. For example, sometimes the terms of payment are vague, as are penalties for late payments. There may also be disagreement over where potential contract disputes should be handled if the contract is silent on those matters. That may require a business’s owner to travel great distances and accumulate significant costs in the event that legal issues arise.
These are just a sampling of the basic matters that must be addressed in a contract’s terms. Yet, even those who include all of these terms in their contracts can run into legal disagreements. Those who want to seek to avoid these contract disputes, as well as those who are already facing them, may want to consider seeking help from a legal professional who knows how to fight for their best interests.