6 Ways to Settle A Contract Agreement Dispute Quickly
Hiring an attorney with experience in contract law will ensure your interests are protected when settling a contract agreement dispute.
Need to settle a contract agreement dispute?
A breach of contract occurs when someone fails to fulfill any part of their contractual obligations.
This may occur due to financial problems, delays, or unexpected events that hinder or prevent someone from successfully fulfilling the contract. When this happens, a contract agreement dispute usually occurs between the parties involved.
Today, we’re going to outline a few steps so you know how to settle a contract agreement dispute quickly and avoid problems in the future.
Let’s get started …
How to Settle A Contract Agreement Dispute In California
There are several ways to handle a contract agreement dispute in California.
Before we get into that, we want to recommend you seek the help of an attorney with experience in contract law before signing anything. It’s always a good idea to have someone look at the terms of a contract before you enter into the agreement, as this may help avoid problems in the future.
Need help handling an existing dispute?
Here’s what you can do to settle contract agreement disputes quickly and avoid them in the future …
1. Review the Contract Terms Carefully
You should, of course, read any contract before you sign it. And if a dispute arises, the first step to resolving it is to read it again. When reviewing your contract, pay particular attention to some specific sections or clauses, including:
- The specific clause(s) that relate to your particular dispute. Have your contractor and (specifically) you fulfilled your obligations?
- Any dispute resolution clause that may spell out the procedures you need to take when attempting to resolve your dispute.
- Any termination clause(s) that may spell out how you can end your contractual relationship if you decide to do so.
2. Try to Negotiate A Settlement
It is always a good idea to attempt to negotiate any dispute with your contractor before taking any legal action. You should calmly point out what you think the contractor did wrong and give him a chance to respond. Some disputes are based on simple misunderstanding or miscommunication. Discuss with your contractor what actions he needs to take to remedy the situation and see how he responds.
Negotiations can become more formalized with the addition of attorneys for both sides. It is the most basic means of settling differences, a back-and-forth communication between the parties with the goal of trying to find a solution.
There are no specific rules or procedures to follow in negotiations. Both sides can determine how best to proceed in a calm manner.The negotiations process can be used at any stage of the dispute – before a lawsuit is filed, while a lawsuit is in progress, at a trial’s conclusion, or before or after an appeal is filed.
3. Consider Contacting State and Local Agencies
Many state contractor licensing agencies or related trade groups have resolution programs for general contractor disputes. Although they may be biased toward the contractor, they would be interested in any dispute involving one of their members. Reputations are important for business. And in any event, should this bear fruit for you, there would be significant cost savings in using this option.
4. Mediation
If your contractor and you fail to reach an agreement, you may want to suggest mediation as the next step.
Mediation is a more structured negotiation process and is overseen by a third-party, independent person known as a mediator. The mediator helps both parties identify the issues in the dispute and helps them reach a mutually satisfactory agreement. It’s a process often conducted by a retired judge or senior construction attorney. It can also be handled by an attorney.
This is a non-binding process, simply designed to help the opposing parties see the situation in an objective way and to see each other’s viewpoint. Any agreement the parties reach during mediation is not binding unless the parties agree to make it binding and put the terms of the resolution in writing, and both parties sign it.
Mediation can be used in most kinds of disputes including the following:
- Consumers and merchants
- Tenants and landlords
- Employees and employers
- Family members in disputes such as divorce or child custody
- Probate issues
- Business disputes
5. Arbitration
Where mediation involves a third party to help with dispute resolution, the two sides maintain control of the process. Arbitration, however, puts control in the hands of that third party as an impartial person to make the final decision.
Arbitration is part of the alternative dispute resolution (ADR) process (along with negotiation and mediation) and is commonly used in those circumstances where the parties’ ability to negotiate has been completely exhausted.
There are arbitration clauses in many contracts, typically in applications for a credit card, stock-broker account, or retirement account. In arbitration, usually both sides are represented by attorneys, and they agree to the arbitrator.
The arbitrator listens to both sides, their documents, evidence, and testimony and makes a decision. The process is similar to a trial in that only one side prevails. But unlike a trial, appeal rights are limited.
Arbitration can be non-binding, but it is designed to be a binding process if both parties agree. And this is what limits the appeal process. An arbitrator’s award can be enforceable in court as a judgment. There are 20 states and 10 federal district courts that use compulsory (but non-binding) arbitration as a prerequisite to litigation.
The process is conducted by a single arbitrator or a panel of three arbitrators and is usually held as a hearing in offices or meeting rooms.
6. Litigation
Breach of contract is one of the most common types of cases settled with business litigation.
This is where an attorney is really important. It is defined as the use of the courts and civil justice system to resolve legal controversies. It can be used to compel the opposing party to participate in the solution.
As mentioned above, many courts require parties to consider some form of ADR before going to trial. Most cases are actually settled this way with only five percent of all cases going to court.
A trial is a formal judicial proceeding that allows each side to present its case to a judge or jury along with any pertinent facts and documentation for full examination.
The decision is made by applying the facts of the case to whatever law applies. The final verdict can conclude the litigation process and be an enforceable decision, or the losing party can appeal the decision to a higher court.
Solving a contract dispute can be as easy as talking with the contractor to mutually resolve the issue. If this doesn’t work, hire a lawyer.
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