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Common Types Of Business Contract Disputes

When two businesses create an agreement of any kind, this agreement is referred to as a contract. Contracts are a vital part of business transactions and dealings, but a lot of businesses end up with challenges and problems related to these contracts. Here are some common challenges that can arise when businesses have contracts and disputes with them.

The Wording Might be Vague

One common problem with contracts involves wording that is vague. If the contract dispute you are currently having is due to vague wording, you are not alone. Vague wording simply means that the contract does not clearly illustrate every detail of the agreement. It may not be complete with the wording, or it might simply not touch on a particular subject.

An example of this would be if the contract stated that you could not sell to other vendors in the nearby area. What exactly does nearby area refer to? Does this mean the same city, or does it mean within the same state? Without clarification, this wording could result in a dispute between the two parties.

It's also important to note that if the terms were written in a way that was confusing, it could also result in disputes. Both parties should fully understand what they are agreeing to when they sign a contract to do business.

The Terms Might Not be Legal

Another challenge companies face with contracts involve parts in the agreement that might not be legal. If any part of the contract requires one or both parties to do something that is illegal, meaning it violates city, state, or federal laws, you may end up with a problem with the other party.

An example of this would be if you hired a trucking company to deliver goods for you and required the driver to drive more hours than what are legally allowed in the state you do business in.

Courts can abolish contracts when they contain things and requirements that are illegal. A contract must contain an agreement that is legal by law.

The Contract Is Not in Written Form

It is not uncommon for two businesses to have an agreement that is not in writing. Unfortunately, an oral contract is much harder to enforce than a written one. This is not saying that oral contracts are void. The problem is that no one has any documentation or proof of what the parties agreed upon when a contract is not in writing. Because of this, you should always make sure you get every contract in writing, and you should allow a lawyer to write it up so that it is legal, fair, complete, and valid.

One Party Was Under Duress When They Made the Contract

One other challenge with contracts that leads to disputes involves a contract that was made when one of the parties was under extreme duress. For example, if you agreed to do business with a company that was about to go bankruptcy, the owner of that company may have agreed to things that are not really fair or reasonable. The owner may have done this out of extreme desperation and duress, and this could end up turning into a contract dispute at some point.

Contracts must be fair and reasonable for all parties involved. If a contract seems unfair or unreasonable, the court will typically side with the person that is not receiving a fair share out of the arrangement.

These are just a few common challenges of contracts. If your business currently has a problem with a contract you have with another business, you should seek help from an attorney that specializes in business litigation.