Contracts are a near constant in our society, including contracts for rent, employment, business relationships, and more. Contracts are legally binding, so their contents and all involved parties’ understanding of them are of the utmost importance. Some disputes may even be resolved by simply referring back to the contract. Still, conflicts will arise that cannot be resolved simply. Often, these conflicts include:
Disagreements on terms and conditions
Multiple documents used in creation of the contract, leading to confusion
Ambiguous terms in the contract
Breach of contract
An issue not specifically addressed in the contract arises
These common causes of contract disputes can often be foreseen and prevented prior to issuing the contract, and some issues can even be amended after the contract has been signed with the consent of all parties involved.
When a conflict arises that cannot be resolved by simply referencing the contract, you can choose to pursue mediation, arbitration, or litigation. Mediation and arbitration involve attempting to resolve the dispute outside of the legal system, though any agreements reached may be legally binding. Litigation, on the other hand, involves the filing of a civil suit. Under California law, you have up to four years after the breach of written contract occurs to file suit, allowing time for mediation and other strategies to be attempted. However, the law only allows two years to file for breach of any contract not put into writing, such as an oral contract, as well as for real-estate and title insurance contracts. In both written and oral contracts, the statute of limitations can be extended if the breach involves deception or fraud, preventing you from discovering the breach initially.
In order to avoid the pitfalls listed above and reduce the risk of a lengthy and potentially expensive legal battle, you can take some simple steps.
Be clear that your terms and conditions will apply to the contract, regardless of the other party’s terms and conditions. This should be clearly stated in the contract, and it is wise to reiterate this in any contract-related communications.
Stick to one document as you create or negotiate a contract to keep all communication in one place. This will ensure that all parties understand which terms are current.
Enlist an attorney in the process of writing and negotiating your contract. Many contract disputes could have been prevented by simply rewording the contract under dispute. Having an experienced attorney review all contract prior to issuing to clients or signing yourself can help to prevent these disputes.
In the event of a dispute, do not attempt to negotiate or resolve the dispute yourself. An experienced attorney can ensure that the dispute is resolved legally and with the best possible outcome. Your attorney can also assist you with mediation or arbitration if you wish to attempt these prior to litigation.
Contact an Attorney
If you are experiencing, or just want to guard against, a business contract dispute, contact the attorneys at Verhagen Bennet LLP right away. We will work with you to prevent contracts open to disputes and to ensure that you are protected in the event of a contract dispute.
© 2019 Verhagen Bennett LLP — This article is for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.