What Are the Most Common Causes of Contract Disputes?

Business owners in all industries are prepared for contract disputes because they are all but inevitable. The most common causes of contract disputes include unclear language, errors, breach of contract, tortious interference, and the violation of non-compete agreements and non-disclosure agreements.

Contract disputes may also involve warranties, questions of liability, and disagreements between business partners.

Although contracts are designed to protect both parties and avoid disputes, either party can misunderstand or breach the contract and cause a dispute. When this happens, the legal system can help the parties find a resolution.

Your lawyer can represent your interests and help you find the most favorable solution.

Errors and Unclear Language

Errors and unclear language can lead to contract disputes because each party may believe they are agreeing to something different. Additionally, the parties may misinterpret the language of the contract and use their interpretation to justify their actions.

Valid contracts must be clear and enforceable, and they should be free of errors. One error can change the entire meaning of a contract.

To avoid contract disputes from errors and unclear language, have an attorney proofread and clarify your contracts before you sign them.

Breach of Contract

If one party fails to honor their end of the agreement, they have breached the contract, and a dispute is likely to arise. Fortunately, a clear and enforceable contract can help the parties resolve the dispute. Usually, the person who breached the contract will be held accountable for their breach in civil court.

Tortious Interference

Contracts only work when outside parties do not interfere with them. Tortious interference occurs when a third party inspires a contract dispute. Instead of further damaging their relationship and pursuing litigation against each other, each party in the contract can sue the third party for causing the dispute and accompanying damages.

Non-Compete Agreements

Businesses may ask employees to sign non-compete agreements. Covenants not to compete are also popular between franchisors and franchisees. To be enforceable, non-compete agreements must be very specific.

If one party violates an enforceable non-compete agreement, they may owe the other party money or be unable to pursue a specific opportunity.

Non-Disclosure Agreements (NDAs)

Leaking information can ruin a business or destroy someone’s reputation. Non-disclosure agreements (NDAs) help keep private information a secret. Contract disputes arise when one party violates an NDA, and if the other party can prove the breach, they may be entitled to damages.

Goods, Services, and Warranties

Most businesses sell goods and/or services and operate within implied and explicit warranties. If the goods or services fall below the consumer’s expectations or violate a warranty, a contract dispute is likely.

A customer may refuse to pay if they are unsatisfied with the service they receive or demand a refund if the product they purchased was defective.

Questions of Liability

Contracts can protect both parties from losses and liability, but if something goes wrong, questions of liability may arise.

The issue of liability can occur in all kinds of contracts, including insurance policies, or outside of contracts in personal injury lawsuits.

Avoiding and Resolving Contract Disputes

Our team at Busch, Reed, Jones & Leeper, P.C. has over 150 years of combined experience helping our clients avoid and resolve contract disputes.

As a broad-stroke litigation firm, we have experience in many different industries and practice areas, including business formation and litigation, insurance defense, and construction litigation.

Whether you want to create a clear and enforceable contract, hold someone accountable for a breach of contract, or defend yourself from claims of wrongdoing, we can help you.

Call us at (770) 629-0154 or contact us online to discuss your situation with a dedicated advocate.