A contractual dispute is when a party to a contract has a disagreement concerning the terms or definitions. If handled poorly, contractual disputes can be costly and timeconsuming, end up in court and damage a company’s business relationships and reputation. So, what should do if you’re on the receiving end of a contract dispute involving your business?
For a contract to be enforceable there must be a “meeting of the minds” across all the required elements, offer; acceptance; capacity; consideration and intention to create legal relations; between all the parties involved. So, all parties must have a solid understanding of every term in the contract and mutually agree on them. Without this mutual agreement, the contract is not legally valid and can be contested in court.
There are therefore different steps that need to be fulfilled during the formation of a contract. This includes an offer being made, an acceptance of that offer, and a form of payment for the goods or services concerning that offer. It is during these stages that contractual disputes can often develop.
In business, a contractual dispute could involve anyone from your employees to your business partners, your clients to your suppliers.
Examples of disputes include:
- Issues when a party reviews your contract
- Issues concerning an offer you’ve made in a contract
- Disagreements regarding the meaning of a contract’s technical terms
- Mistakes and errors concerning the terms you’ve addressed in a contract
- Fraud, such as party claiming they’ve been forced into signing your contract
- Conflict involving your employees or business partners
- Disputes where those involved in a contract do not stand by their original agreements made months or years earlier
Disputes can also involve the performance of a party’s duties, or where they have failed to perform their duties, which have been addressed in a previously formed contract. This is known as breach of contract. An example could be a seller failing to deliver goods to a buyer.
In the event of a contractual dispute arising that affects your business, the important thing is to aim to resolve the situation as best you can. It’s wise to also get the best legal support to help you find the right resolution for your business. You should aim to:
- Find a resolution that isn’t timeconsuming and doesn’t affect the running of your company
- Find a resolution that isn’t costly and doesn’t impact heavily on your company finances
- Find a resolution that doesn’t result in the dispute going to court to avoid additional costs and time
- Find a resolution that doesn’t involve more people than necessary to help keep the dispute under control
- Handle the dispute with care, so not to damage previously existing business relationships and your reputation
When handled without the right skill, knowledge and approach, a contractual dispute can end badly for your business, causing harm to your relationships, reputation, company operation and finances. So, it’s important to have professional support with the right expertise to help things run smoothly, while saving you time, money and stress.
NOT LEGAL ADVICE: Information provided in this Blog, is for information purposes only. It is not and should not be taken as legal advice. You should not relay on or take or fail to take any action based upon this information. Never disregard taking legal advice or delay in seeking legal advice because of something you have read in this blog, or on this website. Ian Randall is an Attorney & Counsellor at Law (NY), with 25 years of Corporate and Commercial experience in several jurisdictions. To see how Owllegal could help you, please visit; www.owllegal.org or email Ian Directly, his email address is firstname.lastname@example.org.