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What are the common reasons for contract disputes?

On Behalf of | Jun 25, 2024 | Business Disputes

A contract outlines specific rules and obligations that parties to the agreement should honor. If the terms in the contract are confusing or vague, contract disputes may arise.

Solving contract disputes can take a long time and cost money, but identifying the potential causes can help you avoid them.

A poorly drafted agreement

Contracts need to be clear and straightforward. As much as possible, it should leave no room for doubt or gray matter. Every word written in a contract comes with real-life implications. To avoid making mistakes while creating the agreement – and prevent potential disputes – it is best if your drafter is well-trained and knowledgeable in contract law.

Breach of contract

One or both parties may breach the terms of a contract agreement. This happens for many reasons, but if both parties take accountability for their mistakes, you can solve breaches amicably.

Problems may arise when the breaching party denies their mistakes. The other party may try to demonstrate how, where, and when the breach of contract occurred, which may create conflict and a business dispute.

Exclusion from the contract creation process

All parties in a contract should provide input into the contract terms. A dispute may quickly arise if one or more parties were not involved during the creation of the contract. Drafting parties may add conditions that are only favorable to some members but challenging for others. This may pave the way for a business dispute in the future.

Poorly defined roles

A well-written contract should clearly describe the roles and responsibilities of all parties involved. This is a vital aspect of a contract because it determines the duties and liabilities of each member. The roles should be well-defined and easily understood, as poorly defined roles may create room for misinterpretation and, eventually, conflict.

Too much jargon

It is essential for contracts not to have too many unnecessary technical terms, especially if parties come from diverse backgrounds or professional fields. Some members may be unfamiliar with some of the terms used and may misinterpret them in a way that conflicts with others.

Crafting your contract in an agreeable way for all parties involved can help you avoid potential conflict areas. An experienced attorney can guide you in drafting an agreement that best fits your business needs.