Tips on preventing business disputes
Many people come to see me after a dispute has arisen in their business operations. I often try to resolve the dispute through negotiation and if that does not work, litigation. Sometimes I reflect on how the dispute could have been avoided in the first place. I have several tips to share with you about steps you can take to avoid disputes in your business.
Tip #1: Make sure your contract says what you think you have agreed upon
I find that many disputes arise from poor contract drafting. The parties enter into a contract without putting much thought into the details, or analyzing whether the contract really reflects how they expect the deal to work. Many people do not spend time thinking through the implications of the various contract provisions. They do not play it out in their mind. And many people do not consider typical issues that might arise and examine how the contract would apply to those issues. Typical sections of a contract where this comes into play include (a) payment provisions; (b) termination provisions: (c) modification terms; (d) the term of the contract; (e) extensions of the contract; (f) intellectual property; (g) confidentiality; and (h) dispute resolution provisions. I have seen disputes arise with all these types of provisions because the parties did not think about what they wanted to have happen in various scenarios that might arise. Some time dedicated to thinking through things can dramatically improve the contract and ensure that things do not go off track when difficulties arise.
Tip #2: Keep good records
I find that sometimes people will claim that a key term of the contract has changed, or that they fulfilled a contract term, yet the other side does not agree with them. In these types of instances, it is important to have documentation reflecting what happened. This can include emails, invoices, notes, texts, and bookkeeping data. The documentation can help resolve a dispute before it gets out of hand if you can document what happened. This comes up a lot in situations where the parties modify the contract terms through a short telephone call and fail to clearly document changes to the contract. If things go south and you end up in litigation, you are going to be very thankful that you can support your position with solid documentation (and so is your lawyer).
Tip #3: Consult with a lawyer
If you are getting into a sticky situation, or you feel uneasy about a developing situation, it is wise to contact your lawyer and talk it through. An attorney can provide good, solid, objective feedback. If it is a situation that it causing your blood pressure to rise, it is good to get that unbiased, objective point of view to help you keep your business on an even keel. An experienced lawyer can also provide examples from previous similar situations that can help you navigate your difficulties.
If you need any assistance with your business, please feel free to contact Clyde Hutchins at 970-488-1857 or contact the firm through the contact form.