Contract disputes are expensive legal proceedings that most people can avoid. Preventing contract disputes starts when you form the contract. Unfortunately, a majority of people do not think about potential disputes in the future when making agreements in the present. They are too focused on getting started, and the legal red tape tends to get rushed or ignored.

Speaking with an experienced lawyer at The Law Office of Jonathan Fleisher, Esq. at (732) 360-6409 can help you prepare quality contracts that reduce the potential for contract disputes.

Negotiate in Good Faith

Each party should negotiate the terms in good faith. Any sign of unscrupulous intentions should be a signal to the other party that it may not be an appropriate contract to enter into with the other person. Negotiating in good faith means that both parties enter the agreement with the intent to agree on contractual terms that are reasonable and equitable for everyone. In order to negotiate in good faith, avoid taking these actions:

  • Making outrageous demands
  • Remaining inflexible on the terms
  • Continually changing the requested terms
  • Deliberately concealing material information

For a contract to be successful, it needs to be equitable for all parties. This makes it less likely for a party to grow dissatisfied or default on the agreement. When a contract is heavily favorable to one party, it creates a situation where the other party may not be able to fulfil their contractual duty.

Be Specific About the Details

Outline everything regarding your agreement in the contract. Do not assume that even the minor details will be understood by everyone. It is crucial to be specific about each party’s expectations when it comes to performance. For example, one party agrees to perform, but the contract is silent on when that performance occurs. This presents an issue because each party could assume a different timeline. In addition to having the required contractual elements under New Jersey contract law, include these details in the contractual agreement:

  • Parties of the contract
  • Contact information for each party
  • Performance timeframe
  • Party responsibilities
  • Quality level expectation
  • Warranties and representations
  • Conflict resolution
  • Early termination
  • Jurisdiction
  • Acceptable communication methods
  • Future contract change procedure

Focus on the End Goal

While including all of the applicable details is imperative, do not allow contract negotiations to get bogged down in the minor details. Modern contract negotiation and formation focus on the end goal or outcome. This eliminates the potential of getting bogged down in cumbersome contract formation. Contact formation has the potential to become complicated and convoluted when parties try to include every possible term or scenario. It also helps to prevent resentment by allowing one party to take over full control and call the shots.

Include an Exit Strategy and Recourse

Plan for future conflict by addressing how any conflicts will be legally resolved in the future. While no one can predict unforeseen circumstances, the contract can address common issues. One of the simplest methods to prevent contract disputes is to include terms on account of breach of contract. Building clauses that provide parties recourse helps resolve conflicts by providing a road map for a resolution that does not involve going to court. The Alternative Dispute Resolution (ADR) program under Local Civil Rule 301.1 governs mediation and can help parties mediate disagreements and avoid lawsuits.

Appropriate consequences can also deter undesirable behavior. This prevents contract disputes by encouraging desirable behavior and encouraging both parties to follow through with their responsibilities.

In addition to recourse, the contract should also include an exit plan for each party. This is a clause that allows each party to terminate the contract. Giving each party an option for termination prevents the forced continuation of the contract. Not enabling a party to terminate leads to one party breaching the contract, and the relationship sours between the parties.

Read the Contract

Always read the entire contract in its entirety before signing it. Do not take the other party’s word that a clause is or is not included. This ensures each party knows what is expected of them and what they are entitled to according to the terms of the contract. Knowing the terms reduces the potential for disputes later on because the parties are not surprised or caught off guard. This is when the parties confirm that the terms included are legitimate. More often than not, disputes arise because of a typo, and by the time it is an issue, parties no longer remember the correct term.

Prioritize Communication

The work does not end once everyone signs the contract. The next step is managing the contract and the relationship between all of the parties involved in the contract. If a potential issue arises, do not be afraid to bring it to the other party’s attention. Staying silent and letting it fester only allows the issue to grow and cause conflicts. The bigger the problem becomes, the more challenging it gets to resolve it. The majority of disputes would never become a major issue if each party got together and talked through a resolution. It is essential to focus on the end goal during this conversation. The goal should be to resolve the issue and continue with the contract. Otherwise, the relationship falls apart, and eventually, so does the contract.

Keep all communications in writing. This creates a traceable record that the parties or anyone else can look to for confirmation of the contract terms. This correspondence will provide insights into each party’s original intentions when forming the contract. Consider visiting with an experienced contract attorney at The Law Office of Jonathan Fleisher, Esq. in order to ensure that your rights are represented in your business contracts.

Contract Management

Managing multiple contracts becomes complicated with multiple deadlines. This increases the potential for breaching a contract and causing disputes. Contact management is essential to ensuring that each contract’s deadlines and terms get fulfilled. Consistently failing to meet deadlines fosters frustration and resentment in the other party. This leads to strained communication and hesitance for conflict resolution when an issue arises.

The best method for managing multiple contracts is to use automation software. The details of the contracts get entered into the software. This makes it simple and straightforward to manage deadlines. It also fosters better communication by enabling parties to be proactive.

Consider Hiring an Experienced Contract Lawyer To Prevent Disputes

Hiring a skilled lawyer to represent you and your interests is one way to prevent contract disputes. With effective legal representation, you can effectively negotiate an equitable contract for both you and the other party. This ensures you have a contract that sets reasonable and manageable expectations. Speak with an experienced lawyer at The Law Office of Jonathan Fleisher, Esq. at (732) 360-6409 about preventing contract disputes with your contractual agreements, and ensure your financial and legal rights remain protected.