06 Mar What to Do When a Contract Is Disputed
Contracts are at the heart of most business relationships, but contract disputes can and do happen for a variety of reasons. If you’re dealing with a disagreement involving a contract you signed, you might be wondering what your options are and what steps you can take to make sure you get a fair resolution for yourself or your business.
Here’s what you need to know about contract disputes, how to avoid them, and how to successfully handle them when they arise.
An intro to contract disputes
The most common reason for contract disputes is a breach of contract, which happens when one party (whether it’s a business or an individual) doesn’t follow through with their end of the deal. Often, this involves not making scheduled payments or missing deadlines. Sometimes contract disputes happen for other reasons, though. For example, disputes might center on:
- The fairness of the contract drafting or negotiation process
- Definitions of technical terms in the contract
- Mistakes in the contract
The best way to avoid contract disputes in the first place is to get everything in writing (rather than just agreeing verbally) and make sure everyone fully understands the terms they are agreeing to. It’s also important to make sure any contract you sign includes a dispute resolution clause. This way, both parties have already agreed on how to handle any potential future disputes.
Now let’s talk about what to do if you’re currently dealing with a contract dispute.
Know what outcome you want
Every situation is different. Maybe the other party breached the contract and you want them to fulfill their obligations. Maybe you feel you were misled when you originally signed and you want to renegotiate. Or maybe you simply want to get out of the contract so you can work with someone else.
You may be stuck in an unfair situation and you may have good reason to be frustrated with the other person or business. Having a clear idea of what a good outcome looks like can help you stay focused on what matters: getting the best possible result and moving forward so you and your business can succeed.
Read the contract again
If you haven’t already done so, go back and reread the entire contract from beginning to end. Depending on how long ago you signed it, quite a bit of time may have passed since you last read through it in full, and it’s important to refresh your memory before making any important decisions.
If the contract contains a dispute resolution clause, read that part especially carefully. That section may give you a clear path forward, and some contracts actually specify that they can be rescinded in certain situations.
If any of the terms are ambiguous, an attorney with experience in business contracts can help you figure out which parts of the contract are enforceable and which parts aren’t.
Document everything that happened
Try to compile a clear record of all your communications and transactions with the other party. This might involve going back and saving copies of old emails, looking through your bank records, and/or writing down the dates of important meetings.
No matter how you decide to move forward, you want to make sure your case is as strong as possible. If the other party breached the contract, this documentation will help you present a clear picture of how and when things went wrong.
Consult an attorney
Even if you have no interest in a lawsuit, it can help to talk about your situation with an attorney who specializes in business contract disputes. Meeting with an attorney will ensure that you fully understand:
- Your rights and the other party’s rights
- All your options for resolving the dispute
- The pros and cons of each option
An attorney can help you decide which course of action is most likely to lead to a result you’re happy with (and which ones could actually end up hurting your business).
Decide how to proceed
If the other party is failing to comply with the obligations they agreed to, you have a right to sue and enforce the contract. In many cases, a lawsuit is the only way to get the other party to comply. Litigation isn’t your only option, though. Many contract disputes can be resolved quickly and inexpensively through mediation or arbitration. These can be good options in cases where the dispute is relatively minor and you both want to avoid going to court.
Deciding whether or not to sue isn’t always an easy choice. It depends on a variety of factors, including how much is at stake for your business, your budget, and the likelihood that you’ll win your case. Some things to consider before you make your decision:
- How much time and money will it cost to go to court?
- What is the quality of your legal representation (and the other party’s)?
- How strong is your case?
- Is it important to you to preserve your relationship with the other person or business?
- How obvious is it that the other party is in the wrong? (This depends on a variety of factors, including the clarity of your contract and the clarity of relevant contract laws in your state.)
The attorneys at JJH Law can help
Contract disputes are stressful and often complex, but resolving them is much easier when you have a skilled and knowledgeable attorney on your side.
The attorneys at JJH Law have years of experience resolving business disputes throughout Oregon and Washington. We always give honest advice and make sure our clients are fully informed of all relevant legal issues before making a decision. Whether your goal is to recover damages that are rightfully yours or to amicably renegotiate the contract, our highest priority is helping you get the best possible resolution.
Contact us today to learn more about how we can help.