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Huw Bowden, Director, Bowden Jones, Shares his Advice on Avoiding Contractual Disputes

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This article has been provided by Bowden Jones.

Disputes happen, even in the best of relationships. Even where the intentions are true and everything is rosy, the proverbial can sometimes end up hitting the fan.

From a legal perspective, following these simple tips you can look to avoid subsequent contract disputes:

  1. Spell out your intentions – in writing

A written contract is arguably the best protection against legal disputes.  It does not matter if you have the best of relationships with the other party – get the contract in writing to provide both parties with the security of a written legal document.

Draft the contract and be clear, precise and direct. Review each clause; is its meaning clear? And remember to have both parties sign it.

  1. Who does what?

The contract should state exactly what is understood to have been agreed and accurately reflect the parties’ respective intentions.  The contract should leave the parties in no doubt as to what is expected of them. The parties’ rights and obligations should be plainly set out, as well as details as to what will happen if things do go wrong.

  1. Record keeping

Keep a record of any written correspondence between you and the other party, even pre-contact negotiations. Keep your paperwork in order and confirm everything you discuss in writing, an email is fine, but make sure you get it down.  If there is a dispute later down the line, then a paper trail can be used to support what the common intentions of the parties were.

  1. Play fair

In order for the contract to be enforceable, your contract terms have to be fair. Do not try and hide the nasty clauses in the small print or deep in the contract; a court will likely deem the terms unfair and unenforceable.  Tread carefully when it comes to any clauses which seek to exclude or limit liability.

  1. Exit strategy

It is worth making sure that there are proper termination clauses in place when preparing the agreement. If a party cannot, or does not want to, continue with a contract, for whatever reason, then it is advisable to have the appropriate termination clause in position to allow the contract to be terminated.

  1. Review and update

Make sure you review your contract documentation regularly so it remains fresh and serves the parties as intended.  If any modifications are required, then these should be confirmed in writing. Make sure to get a signature on a modified contract, or send a confirming letter.