Business to business contracts are established to ensure that everyone is on the same page, and to protect the interests of both sides. When written well, they help to prevent disputes from arising in the first place, because they are clear on the consequences of certain actions, and they leave nothing to interpretation.
However, no matter how well a business to business contract is written, there is still a small possibility of a dispute. This is why it is important that you understand how disputes tend to arise so that you can more easily address the underlying issues to make a resolution. The following are some of the most common causes of contract disputes, and some suggestions on how these disputes can be resolved.
Disputes resulting from contract interpretation
If a contract is written in an unclear way, one party may have interpreted a clause to mean one thing, while the other party may have interpreted it to mean something completely different. In this situation, one party may accuse the other of breaching the contract, and a dispute can arise. It is important that the contents of the contract are addressed as soon as possible. By involving mediation experts, you may be able to get the issue addressed more efficiently.
Disputes escalating because of a lack of dispute resolution clauses
Sometimes a relatively minor dispute can become amplified as a result of a lack of dispute resolution clauses in the contract. A well written contract should make sure to outline what would happen in the event of dispute. If this is not addressed, you should consider going through mediation to resolve the issue.
Disputes arising because of missed deadlines or payment delays
Missed deadlines and payment delays can have far-reaching effects on the production potential of a business. Therefore, the damages that the breach of contract resulted in will need to be addressed. If you want to avoid a potentially costly lawsuit, you may want to look further into your options regarding alternative dispute resolution.
If your business is trying to navigate a breach of contract in California, it is important that you do not delay taking action in response to this.