Resolving Contract Disputes Without Going to Court

On Behalf of | May 15, 2020 | Business Law

In the current environment, employers may be focused on everything from managing changes in the workforce to adjusting operations in response to state-ordered closures. With so much to think about, disagreements regarding contracts can be especially disruptive.

If you are in a contract dispute, it can be in everyone’s best interests to resolve it quickly and without the added time and expense of litigation. Below are some suggestions for how to approach this.

Determining the crux of the issue

Whether a contractual dispute stems from a violation of a non-compete agreement or from a contractor’s failure to perform, you should first attempt to narrow the issues.

If you cannot agree on what the problem is – or that there even is a problem – corrective action may not be possible. But in some cases, one party may not realize there is a contractual breach until the other party informs them of it.

Pursuing mediation

Mediation, also referred to as alternative dispute resolution (ADR), is an alternative to litigation. Along with arbitration, early neutral evaluation, and mini-trials, mediation is a process of resolving legal issues outside of court using a neutral third party.

As this article discusses, there are many benefits of ADR, from being faster to often costing less than litigation. As such, if you want to resolve a contract dispute quickly and without exhausting your business’s resources, ADR can make it easier to accomplish these goals.

Finding a fix

There are various ways to resolve a contract dispute. Solutions will depend on what the breach is and how it affects the rest of the contract. However, there will generally be one of three possible outcomes to a contract dispute:

  1. The breaching party performs the duties detailed in the contract;
  2. The breaching party pays the non-breaching party for damages resulting from the breach; and/or
  3. The parties cancel the contract.

If you can agree on how to remedy the dispute, you can move forward more quickly. If you cannot agree on a remedy, you may need to go to court for a decision. This can take more time, but in some cases, it may be unavoidable.

Contract disputes can be upsetting, frustrating and disruptive. Resolving them as quickly and peacefully as possible can make it easier for a business to recover.