At the foundation of most business relationships are commercial contracts. For both big and small businesses, having a solidly written contract can help to avoid disputes in the future, but unfortunately, this is not always the case. Common contracts that businesses run into problems over include vendor agreements, partnership deals, and service contracts. The obligations, expectations, and outcomes outlined in these and other contracts are ones that businesses rely on to help them run smoothly.
Below, our friends at Volpe Law LLC discuss some of the more common commercial contract disputes that business owners face.
Disputes
Both in business and in life, disputes often arise when one party fails to uphold the terms of an agreement, obligation, or promises they have made. These are often caused by a breakdown in communication, and specifically in business, different interpretations of a contract’s language. These can be difficult and exhausting to resolve but even more difficult is when a party willfully breaches an agreement. And when this triggers serious financial consequences, it can be devastating.
Breach Of Payment
Delayed or missing payments are two of the most common ways businesses break their business contracts. When payments are not made or are made but after their due date, it can cause cash flow issues, especially for small businesses, strain partnerships, and stall projects. Unfortunately, these financial breaches often require formal resolution, hopefully in the form of mediation but if it cannot be mediated, in the form of litigation.
Failure To Deliver
While sometimes the circumstances are out of a business’s control, when they fail to deliver promised products or services, it can create operational damage, as well as damaging reputations. These failures are commonly caused by workforce shortages, supply chain problems, or disagreements over the scope of the work that was agreed upon. A party who suffers from these types of failures may pursue legal remedies to offset their losses.
Disagreements Over What A Contract Says
When businesses agree to a contract, typically, all the parties involved understand what the contract says but in reality, vague terms, missing clauses, and inconsistent language are often a part of the contracts that do not get questioned until a dispute arises. When a contract doesn’t clearly define expectations or obligations and disputes arise, it may take an arbitrator or a judge to decide how the contract should be interpreted and what actions need to be taken for it to be enforced.
Termination Issues
If an agreement ends before the work outlined in it is finished, whether voluntarily or because of a disagreement, and the contract’s termination clauses are not clearly written or followed properly, conflicts often arise. If you are a business owner who is dealing with a conflict over fees, intellectual property, outstanding obligations, or have any other business or contract-related issues, a business lawyer can provide legal guidance and advice.
Legal Counsel Can Help
Regardless of the cause of a business contract dispute, resolving it often requires the help of a commercial contract lawyer. A qualified lawyer can help to assess the dispute, explore options, and help you to efficiently move toward a favorable outcome.