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How to minimize the risk of a contract dispute

On Behalf of | Dec 18, 2023 | Contract Disputes

Businesses and individuals enter into thousands of contracts in New York each year. And while most contracts are satisfactory for both parties, a sizeable minority result in some form of contract dispute.

Contract disputes can be costly and time-consuming, and even ultimately winning in court can leave you out a significant amount of money in legal fees and lost time. Having strategies for mitigating the risk of contract disputes can be the difference between a thriving business and a struggling one.

Proactive methods of risk minimization

Most contract disputes are created when the original contract is being created, negotiated on and agreed to. Even if those disputes don’t manifest for months or years, the seeds are often planted right at the beginning.

You must create clear and comprehensive language in the contract specifying exactly what rights and responsibilities all parties have within the agreement. One of the most frequent causes of contract disputes is nebulous or incomplete language in a contract. Both parties tend to settle on the reading of unclear language that’s best for their own interests, leading to problems.

Due diligence is also critical in avoiding contract issues. If you enter into a major contract with a business or individual, take the time and effort to look into their financial history and any other relevant information. If there are red flags, it may be wiser to move on.

Contract Maintenance

One of the best strategies for avoiding contract disputes is to treat a contract as a living document. This means several things.

First of all, make sure to document any amendments or changes to your agreement in writing. It can be tempting to leave it as a verbal agreement, but it’s much more difficult to resolve disputes if so.

Second, make a point of reassessing the contract periodically. Changes in the business environment, legal landscape or either party’s circumstances can require a revision to the original document.

Contract disputes can be costly and time-consuming; avoiding them is highly desirable. The above strategies give you some ways to protect yourself from the likelihood of a contract dispute in the future.