Contract disputes are the most common disputes in business or commercial dealings. When any dispute occurs in between the parties, you may find the difference in interpretation of the contract. Contractual disputes can arise in between suppliers and retailers, contractors and subcontractors, in between partners, in between parties to a land contract or in a joint venture agreement.
Contract disputes arise as a result of breach of contractual term by any of the party to the contract. Non-performance according to the terms of the contract is also considered as the most common cause of any contract dispute.
Disagreements over interpretation of terms in the contract between the parties and any dispute arising due to such difference may also be considered as one of major reasons for contract dispute. Contract disputes can arise from various agreements which may later become a source of conflict between the parties to those agreements. The agreements include:
- Service agreements involving contracts for the supply of goods and services or contract to render a particular service;
- Contracts relating to lease, sale or purchase of land and property;
- Construction contracts;
- Government contracts;
- Finance and loan agreements;
- Joint venture agreements;
- Shareholders agreements;
- Licensing and franchising agreements;
- Employment agreements;
- Commercial agency agreements; and
- Marketing and sponsorship agreements.
Factors Assessing Contract Disputes
While considering a contract dispute, one should be mindful of the following factors:
- Application of the standard term to the contract;
- If standard terms of trade are not specified, then on what grounds the claim is established;
- Effect of oral agreement in the dispute;
- Presence of limitation of liability of either of the party; or
- The recourse taken by both the parties for resolving disputes.
Contractual disputes may be resolved by adopting any of the three options outlined below:
- Negotiation: Negotiation is considered to be one of the easiest forms of dispute resolution process. It is often seen that the parties to the dispute(s) negotiate a resolution that is agreed by both, without the need for formal mediation. However our Solicitor always recommends writing any verbal agreement made during such negotiation.
- Mediation and Arbitration: Mediation or Arbitration is another option available to resolve the dispute(s) if negotiation fails. Mediation and arbitration are usually considered as one of the cheaper and quicker ways to resolve the dispute as compared to the Courts. The Arbitrator will hear both sides of the dispute and make a decision which is legally binding on the parties. Arbitration proceedings are very similar to the Court proceedings. All the proceedings including accepting evidence, questioning witnesses and deciding appropriate remedies are same as the Court proceedings. Arbitration can be voluntarily initiated by the parties.
- Court proceedings: It is the last option available to the parties of dispute, in case a dispute cannot be resolved by ways of negotiation, mediation and arbitration. The Court can try a dispute falling under its jurisdiction, depending on the monetary valuation of the claim made by either of the party to the dispute.
Contract disputes are common in the running of a business and our team at Owen Hodge Lawyers are proficient to offer advice and take all necessary steps on the client’s behalf to ensure speedy and effective resolution of any dispute.
Contact our Sydney business lawyers today to discuss how we can help you with your contract disputes.