Contract disputes can take a costly toll on businesses. They can divert resources away from normal operations, create delays and derail relationships that are in place to keep a company on track. With so much at stake, avoiding conflicts related to contracts is crucial. There are a few steps you can take to do this.
Get help creating your contracts
Contracts can be complex, with a lot of legal jargon. You might feel tempted to simplify things by creating contracts yourself or agreeing to a general outline of expectations.
Unfortunately, taking this route could leave you vulnerable to misinterpretations and financial losses because of oversights or mistakes. Contracts are legal documents, and to ensure they are fair and valid, having an attorney assist in creating them can be crucial.
Be sure you know what you are signing
No matter who creates a contract, you must review it so that you know what you are agreeing to before you sign it. Even if you are entering into an agreement with your best friend, a family member or a long-term business associate, you must understand what the contract requires of you and them.
Take your time to review the document carefully and with your lawyer. Ask for clarity and explanation if necessary; make changes if you need to; negotiate clauses you may or may not want to be included. Understanding the contract can go a long way in preventing disputes down the line.
Include clauses for conflict resolution
Even if you have a solid contract, disputes can arise that you could not foresee or prevent. Because making decisions in the heat of a disagreement can be incredibly complicated and frustrating, you can do yourself a favor by including clauses in the contract that specify procedures for resolving conflicts or disputes.
For instance, will you arbitrate or mediate the dispute? Will you work with specific parties? In which jurisdiction will legal proceedings take place?
Answering these questions in your contract can provide valuable guidance and direction should you find yourself in a disagreement with the other party or parties.
The foregoing steps can help you avoid contractual disputes and prevent conflicts from derailing agreements and commitments.