A Better way to avoid and handle Contract Disputes: Legal Remedies and Enforcement Options
Contract disputes are an unfortunate and unpleasant part of doing business, and when they arise, you should know your legal rights and the remedies available to resolve them. We have some strong opinions below, so let us know what you think.
What Are Contract Disputes?
Before getting into how to resolve contract disputes, it’s essential to define what constitutes a contract dispute. Simply put, a contract dispute occurs when one or more parties involved in a legally binding agreement fail to uphold their end of the bargain.
These disputes can arise in a variety of scenarios, including issues related to non-performance, delays, ambiguous contract terms, or misunderstandings about obligations.
Whether the contract is related to business services, employment, real estate, or a simple transaction between individuals, the presence of a dispute often signals that one or more parties believe that the terms of the agreement have been violated or misunderstood.
Common Causes of Contract Disputes
There are several reasons why contract disputes arise. Some of the most common include:
Failure to perform obligations: One party may not have fulfilled their duties as specified in the contract, leading to dissatisfaction or financial loss for the other party.
Misinterpretation of terms: Ambiguous or unclear contract language can lead to different interpretations, making it difficult to enforce the agreement as intended.
Breach of contract: When one party fails to uphold their end of the agreement, whether intentionally or due to unforeseen circumstances, this can lead to a breach.
Non-payment: If one party refuses or fails to pay for services rendered, it can result in a contractual dispute.
Wrongful termination: In the case of employment contracts, wrongful termination can result in disputes over the enforcement of termination clauses.
Regardless of the reason, once a dispute arises, it’s vital to address the issue swiftly to prevent any potential legal or financial repercussions.
STRONG POINT OF VIEW regarding Contract Disputes
Most lawyers won't tell you that filing a lawsuit is the SLOW and EXPENSIVE way to resolve a contract dispute. They have litigators in their firm, so they're happy to take your money to file a lawsuit. At the Fixed Fee Law Firm, PLLC, we don't handle ANY contract disputes or have any litigators on staff, so we're happy to let you know that there are better ways to proceed.
Good Faith Negotiations
Often the parties can resolve a dispute simply by talking as rational human beings. That's why we put a 30 day good faith negotiations clause in almost all our business contracts.
Mediation
If good faith negotiations don't resolve the issue, Mediation is my recommended alternative dispute resolution (ADR) method that encourages parties to work together to resolve their differences with the help of a neutral third-party mediator. Mediation is strongly preferred over litigation because it’s generally quicker, less expensive, and can preserve business relationships. Many people are not aware that 80-90% of business disputes result in a mutually agreeable solution without the need for for a lawsuit and maybe even without hiring lawyers.
Arbitration
In the rare cases where mediation does not resolve the issues, Arbitration is another form of ADR where an impartial third party, known as the arbitrator, hears both sides of the dispute and makes a final decision. Unlike mediation, the decision in arbitration is binding, and the parties must adhere to it. Arbitration is much faster than litigation and is often used when the parties have agreed to an arbitration clause in their contract.
Filing a Lawsuit
If the dispute can’t be resolved through negotiation or alternative dispute resolution (ADR) methods, filing a lawsuit is your worst and most costly option.
Injunctions
In cases where immediate action is required, such as preventing the defendant from continuing to breach the contract, a party may seek an injunction. An injunction is a court order that requires the party to do something (or refrain from doing something). This can be a powerful tool in cases where time-sensitive issues need to be addressed.
Don't Call - PREPARE
If you’re involved in a contract dispute, don’t call The Fixed Fee Law Firm, PLLC. As stated above, we don't handle disputes of any kind. But if you want to avoid them by having solid contracts that mandate good faith negotiations, then mediation and finally binding arbitration if necessary, then we are the firm for you.
