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Managing Contract Disputes

Contract disputes, such as differences of opinion about the contract terms or whether one party failed to adhere to the agreement, can arise at any point while multiple parties are doing business together. 

Conflicts may occur over the contents of the contract itself, especially if it contains an ambiguous clause that each party interprets differently. 

Other disputes may arise over exceptions to the terms. An exceptional events clause indicates that the contract is not valid or otherwise cannot be completed because of certain weather-related events or other interruptions to business operations. 

What constitutes an exceptional event may look different to one party, and a dispute may arise over their failure to complete the contract.

When a contract dispute occurs, it’s essential to have a business lawyer represent your interests. You and the other party have several options to manage disputes and come to an agreement.

Mediation

Mediation is a dispute resolution process where both parties negotiate under the supervision of an unbiased third party experienced in conflict resolution and negotiation techniques. 

Both parties meet in a neutral location. Legal representation is optional but not required. Once the parties agree on the terms of resolving their contract, that written agreement is as binding as any other contract.

Mediation allows both parties to play a direct role in conflict resolution. Effective mediation can also help preserve the relationship between the two parties. Mediation is often less time-consuming and less expensive than taking the dispute to court.

Arbitration

Arbitration is similar to mediation, but at the end of the discussion, the arbitrator determines the outcome, which legally binds both parties. Those involved may not have as much input into the final decision as they would have through mediation. The benefit of arbitration rather than a trial is it is less formally structured than court and moves more quickly.

Arbitration can occur either before or after one party has lodged a formal legal complaint. Sometimes, the court may instruct both parties to complete the arbitration process, especially if arbitration for dispute resolution is already written into the contract.

Each party presents evidence before the arbitrator or panel of arbitrators during the process. They make arguments according to their side of the story and call witnesses. 

After the hearing, the arbitrator issues a ruling. One party may appeal the decision, and if they don’t, the decision is final.

Collaborative Law

Collaborative law is another process that allows disputing parties to avoid litigation. Both parties and their lawyers meet to negotiate the collaborative process, state their goals and interests, and consider options to meet those goals and resolve the dispute. This is a confidential process, and the parties involved have overall control of the settlement.

Collaborative law is best when each party wants complete confidentiality, and the relationship between both parties allows them to come to a reasonable accommodation.

Traditional Litigation

Traditional litigation takes the contract dispute to court after one party sues the other for breach of contract or otherwise violating the terms of the contract. If the parties can’t resolve their dispute through a negotiation process, they’ll go before a judge. 

Litigation can be time-consuming and costly, but if you can’t resolve your conflict over a contract by any other means, the court is your best recourse for a legally enforceable resolution. 

Sometimes, a conflict might involve complicated issues about the contract and will need a legal analysis to effect resolution. Other times, the relationship between both parties has completely broken down and they can’t agree on anything. In these cases, court is the most favorable option.

At Woods Lonergan, our experienced New York City business attorneys can review your contracts and help you understand your options for dispute resolution. Get in touch with our office today.