Contract Disputes

1. In contract disputes, the two greatest contributors, as identified in the Methven & Associates article, are failure to address all possible situations and ambiguity in the provisions. Using plain English as opposed to legalese in writing a contract is preferable. This is to ensure the parties involved have a clear understanding of the provisions. Lack of understanding creates difficulties when attempts are made to enforce the contract. Furthermore, the parties may exchange multiple letters of intent. A letter of intent is a document expressing the intentions of one party towards another in the process of forming an agreement or contract. It is prudent to always identify whether the material in a letter of intent is to be binding or open

The article identified multiple tips for forming contracts which include the following. Clearly specify the terms of performance, what responsibilities each party has, when tasks must be completed, and what penalties, if any, will come as a result of failure to perform. Determine how the other party must handle any confidential information. Write a termination clause and what penalties may be assessed for early termination. Reduce the exposure of UCC warranties if the transaction involves goods. Limit the changes that can be made to the contract and in what form, oral or written. Finally, address how the enforcement of the contract is to be handled; this should include whether disputes are to be arbitrated and who bears the legal costs and attorney fees. Of these tips for improving contracts and reducing risk, I believe they are all equally important. One should take a holistic approach to utilizing each of these tips to mitigate the risks of losing future legal disputes arising from a contract.
3. Ambiguity in a contract shall be construed against the drafting party. This has been common practice of the courts and I believe it to be fair. The author of the contract, as the drafting party, has the opportunity to eliminate any ambiguity that exists. If they did not clarify, it should be viewed as an intentional action to allow for future interpretation, even if it were to benefit the other party in a greater manner than