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2 common causes of contract disputes

Contracts are crucial for every party involved in your business, be it employees, partners, shareholders, vendors and so on. They ensure operations go smoothly, as they define each party’s roles and give detailed terms. However, you should write binding contracts to avoid disputes.

This guide discusses two common causes of contract disputes.

Unclear terms

Vagueness can lead to a contract dispute. For instance, if you are unclear about your partner’s scope of authority, they may make critical decisions in an area they shouldn’t. If you are not specific about the quality and quantity of goods and timelines for delivery, you are bound to be in dispute with your suppliers. Thus, it will help to have clear terms in all clauses of your contract.

Poor drafting

A contract may be clear, but if it was poorly written, the chances of being in a misunderstanding with an involved party are high. You should understand contract law when drafting a contract to ensure everything is valid. 

You should also avoid giving parties multiple contracts if this isn’t necessary. Take your time and draft one in-depth contract. If there are changes in the company, ensure the existing contract is legally revoked before they sign another one.

Additionally, when drafting contracts, especially for principals/ partners, it may be best for them to be present, even though you may have a higher percentage of ownership. When parties are excluded from the contract creation process, they may refuse to sign or can breach it in the future. You don’t need to ask for their views on every clause, but they should provide input into the terms to ensure the contract is fair.

Contractual issues are significant. You should get legal help to solve disputes that may arise while protecting the business.