Tips to Prevent Contract Disputes
Over the past 10 years, we have seen their fair share of contract disputes. Through litigating each of these cases, our attorneys have learned the characteristics that make a good contract. Below is our list of the top ways to help prevent a contract dispute.
- Clearly list all of the parties involved. This may seem obvious, but if the contract deals with corporate entities or multiple parties it is important to make sure each party is listed correctly and consistently throughout the contract.
- Clearly define all responsibilities. Identify the scope of duties for each party. The contract should clearly outline each party’s responsibilities. Having a clearly defined duties can help prevent confusion or complications down the road.
- Be specific on the timeframe for performance. Establish a timeframe for when the work should be completed. If it is going to be a long term project think about including checkpoints or deadlines for each phase.
- Establish the level of quality and set expectations. Clearly state the expectations you have for the final product. For example, if you are installing wood floors in your house you may want to specify the direction or how closely you would like the boards to be laid. Make sure to include not only the level of quality expected, but also the person responsible for determining the quality has been met (the customer, the contractor, or a third party).
- Document all aspects of the contract. Make sure to keep a full copy of the contract (including addenda, attachments, project schedules, etc.) all in one place. If there are questions later it is important to be able to refer back to your copy.
- Specify how any changes to the contract will be made. Sometimes the terms of the agreement are modified. Specify if changes must be submitted in writing, signed off by all parties, or just discussed over the phone. Make sure a procedure is established for changes by each party.
- Understand any warranties or representations that are made in the contract. If there are warranties or guarantees made, it is always a good idea to make sure the contract explains the specifics. For example, if a product is covered, you would want to know if the manufacturer or the seller is covering the warranty, what parts of the product are covered, how long the product is covered, etc.
- Read the contract before you sign. Yes, this includes all the fine print, addenda, etc. Read the full document and understand all of the terms, as well as exactly what is expected of you before signing.
Remember that each situation is different. If you are concerned about the terms outlined in a contract or want specific portions of the contract clarified, it may be a good idea to have an attorney at Powers Taylor review the contract before signing.
For more tips on items that should be included in a construction contract read our article series on contractors.