A dispute contract is a legal document that sets out the terms between two or more parties. It can cover any variety of disputes ranging from minor inconsistencies to serious breaches of agreement.
Disputes can be prevented by preparing your contract carefully and making sure that it meets the requirements of the law. The most important thing to remember is to make it as clear and plain as possible, with the aim of avoiding misunderstandings and misinterpretations.
If there is a dispute, it should be dealt with as soon as possible so that you can avoid the need to start court proceedings and the potential for costs. This should involve checking any specific deadlines within the contract itself and being alive to any applicable statutory limitation periods.
You should also ensure that you have included a jurisdiction clause in your contract, which states where it will be dealt with if a dispute arises. A non-exclusive jurisdiction clause, in which you agree to be bound by a particular jurisdiction but without prejudice to your right to refer the dispute to another jurisdiction, is particularly useful and can provide some flexibility.
In many cases, you will need to get help from a solicitor before you can begin bringing legal action against the other party. Generally speaking, you should try to resolve the issue by informal means first, such as negotiation and mediation.
However, you should be aware that these methods are not always effective and may not be able to achieve the desired outcome. This is why it is important to ensure that you have the best possible legal advice at the outset so that you can be certain of your rights and responsibilities.
Using a dispute resolution method that is suitable for your situation will depend on several factors, including the size of the business and the nature of your legal dispute. For instance, if you are a small business owner with limited resources, it is probably best to choose a less costly method such as alternative dispute resolution or arbitration.
For larger businesses, the approach will likely be to employ a combination of both competitive and cooperative dispute resolution methods. In a study of 102 interfirm contracts, professors Deepak Malhotra of Harvard Business School and Fabrice Lumineau of the University of Technology in Sydney found that when even highly detailed contracts focused on coordination rather than control, parties were more likely to use cooperative approaches in contract dispute resolution, reducing their legal costs while achieving better outcomes.
A cooperative approach was most effective when one party was much more powerful than the other; however, it had no significant impact on legal costs when the parties were equally matched.
The most common dispute resolution methods are mediation and arbitration. Both of these methods involve a third party (an arbitrator or mediator) who will try to reach a solution that is beneficial for both parties.
If you have a dispute with a party to a contract, you should be aware that the contract often contains an “early neutral evaluation” (ENE). This is where a neutral third party will consider all of the arguments in dispute and give a view as to what the likely outcome of the trial is. It is often a good idea to include this in the contract as it will be binding on both sides and may save time and money by eliminating the need for trial.