For many businesses in California, contracts form the bedrock of relationships with vendors, suppliers, service providers and even customers. That’s why it is so important for contracts to be carefully drafted, attempting to anticipate problems before they arise—and how to deal with them if they do.
Facing a contract dispute
If you find yourself in a contract dispute with another entity, chances are that someone is throwing around the term “breach of contract.” That isn’t a position that any business wants to be in, because then the rising specter of potential business litigation isn’t too far behind. And, as many of our readers know, business litigation can often consume huge amounts of resources from a company, mainly in time and money. It is something to avoid if at all possible, most of the time.
So, if you have a looming contract dispute on the horizon, it is time to assess your options. For starters, what does the contract say about any potential breach of contract? Do you have options there? For example, the contract may say that you can terminate the contract “without cause”—for any reason or no reason at all. Is it better to just terminate the contract and move on to a relationship with another business that can fill the need? Or, is there a process described in the contract for how disputes will be handled? Maybe the contract says that the parties will be obligated to participate in mediation or arbitration before any drastic steps—like terminating the contract—can be taken.
Every contract is unique, but when a dispute arises, usually the first place to look for options is in the contract language itself. If, from there, you need to look at options such as initiating litigation, you will at least have a firm grasp of the contract terms and conditions after a thorough review.