Entering into a contract opens the possibility of a future dispute—it’s an inherent business risk. However, there are many actions you can take on the front-end to minimize disputes down the road. Use these proactive contract management strategies to reduce the likelihood of misunderstandings and disagreements. Even with these tips, you may still find yourself in the middle of a business dispute and unsure of what to do next. In the event of a business dispute contact William Cooper Law. to reach a resolution.
- Invest time in negotiating terms– Don’t rush through contract negotiations or leave issues unresolved just to seal a deal. Slow down, communicate thoroughly, and ensure all parties share the same expectations. Identify any vague language or potential points of disagreement and hammer out specifics.
- Clarify roles and responsibilities– Spell out each party’s obligations, duties, and project scope in the contract to eliminate confusion about who is accountable for what. Remove assumptions by delineating stakeholders’ specific roles. Define what key milestones and deliverables look like.
- Build in quality assurance safeguards– To verify satisfactory contract performance, include objective quality assurance review points. For example, require written client acceptance reviews at set intervals or upon completion of defined work phases before payment is issued.
- Create precise payment procedures– Detail invoice submission procedures, payment methods, and payment schedules in the contract to avoid financial disputes. Define what constitutes acceptable work warranting payment and what documentation must be presented to trigger scheduled payments.
- Allow for flexibility using “change order” protocols– Recognize that modifications may become necessary over long-term or complex contracts by providing clear change order procedures. These allow adjustments to the scope, timeline, or payment terms by mutual written agreement only so random unilateral changes are not made.
- Write in precise renewal/termination provisions– Eliminate perceptions of unfair surprise renewals or unexpected cancellations by setting exact renewal and termination clauses, including required notices and timeframes. Define what breach of contract looks like.
- Include unambiguous dispute resolution procedures– Specify constructive procedures for resolving disagreements, like required good faith negotiations, mediation attempts, arbitration submission rules, etc. before resorting to court action. This demonstrates a mutual commitment to avoiding litigation.
- Seek legal review– While no contract can guarantee a trouble-free relationship, an experienced business attorney can help structure agreements to control risk. Legal advice may uncover vulnerabilities you didn’t spot and advise on optimal phrasing and organization.
While crafting a detailed, thoughtful contract requires an investment of time, the payoff will be fewer unanticipated troubles down the road. Set your business dealings up for success by proactively managing contract particulars and processes from the very beginning. An ounce of prevention truly is worth a pound of cure where contracts are concerned!
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