Brundage Law P.A.

Business Lawyers For Business People

4 factors that contribute to contractual disputes in business

On Behalf of | Apr 8, 2023 | Business Litigation |

Contracts protect involved parties, explain each party’s responsibilities, guarantee confidentiality and prevent disputes. Thus, you should create an agreement for every party you work with. However, contractual disputes may arise in the future.

This guide discusses four factors that may contribute to such disputes. They include:

1. Vagueness

Vagueness is one of the leading causes of contractual disputes. Thus, you should avoid statements that can be interpreted differently. Further, encourage involved parties to ask questions before signing. You should also re-read contracts to ensure every clause has clear sentences before putting it down for signatures.

2. Poorly defined responsibilities

The parties you work with, be it your employees, partners or shareholders, all have roles they need to observe, which you will include in their respective contracts. The language you use when describing these responsibilities should be clear. Everyone should understand what the company expects from them upon reading the contract.

3. No reading or reflection time

It’s fair for parties to have enough time to go through a contract before signing. Without enough time, someone may not understand the contract in-depth and may breach it in the future. Thus, consider giving the other party at least a few days to read through the contract and make informed decisions.

4. Obtuse wording

Technical terminology and overly complex language can lead to contractual disputes because one may misinterpret a term. That can lead to a breach of the agreement. It will be best to define specialized terms used in the contract. Consider doing this at the beginning of the contract to make work more manageable for the readers. 

Contractual disputes can harm a business and result in lawsuits. It will help to get legal guidance to solve any contract-related dispute to protect the company.