Key Ways to Avoid Contract Disputes
The entire purpose of creating a contract between two parties is to eliminate the possibility of either side backing out, changing their mind or altering the pay or timeline of a project. Unfortunately, contracts are not 100 percent effective in that sense and there are many contract disputes.
Whether you have hired a company who is not able to stick to their predetermined guideline or you are an independent contractor who has several payments way overdue, you know that contract disputes can still occur.
There are several reasons that these disputes take place, but many of the most common causes can be avoided or resolved entirely by adhering to the following suggestions.
Always Put Contracts in Writing
The first and most important way to avoid contract disputes is to put all verbal agreements in writing. When working with a close friend or a family member, it can be easy to make a verbal agreement in person or over the phone and then forget to follow through.
However, this is the key cause of disputes later on down the line. Even if the person you are working with has agreed to something, immediately draft a written version of the agreement and ask them to sign it. It may seem like an unnecessary formality, but it can prevent either side from asking or taking more than was originally settled upon.
Establish a Clear Time Schedule
A leading cause of disputes over contracts has to do with the time frame for projects. Contracts should include not just the details of the work to be done and the price, because the scheduling is also vital.
If you need to have something done in one month and it doesn’t get done for more than a year, you need to ensure that you aren’t responsible for paying for that work. Adding in specific information for the timing and scheduling of any projects is an important part of the contract, and don’t be embarrassed to tack on financial penalties or fee reductions for anything that goes over the deadline.
Have an Attorney Look Over the Contract Before Signing
It is not unusual to talk with an attorney in the case of a contract dispute, but fewer people contact their attorney during the drafting of the contract. Rather than waiting until there is a problem, it is much smarter to fix the contract before you even sign it.
A trained contract attorney can easily spot any major flaws or lead you to a suitable arrangement between two parties.
Add in a Clause For Early Termination
If you are working with someone new and you are still uncertain about their reliability or quality of work, you can add in a clause that allows for early termination. This is great if you are planning a larger project, as it may be cheaper to get out right away than to follow through on something you know won’t be successful.
Independent contractors can also benefit by getting rid of clients who are not able to stay in contact or who don’t see eye to eye with your vision.
Allow the Other Party the Opportunity to Resolve the Problem
When you do realize that a conflict is there, first give the other party the opportunity to resolve the issue without legal action. In many cases, they will fix the problem without you needing to spend a fortune on legal fees.
These tips are simple and effective ways to avoid contract disputes between partners, firms and independent contractors. However, if you do find yourself in a serious dispute, an attorney specializing in civil law can help resolve these issues.