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Follow these tips to avoid contract disputes

Contract disputes are a messy part of owning a business that you may believe are inevitable. All too often, an employee or partner takes issue with some part of a contract, no matter how minute, resulting in costly litigation for your company.

There are, however, ways to avoid contract disputes. You should know a few key strategies for avoiding potential lawsuits. This post goes over three tips for avoiding contract disputes that you can incorporate into your future contracts.

Think ahead

You may be focused on creating a contract that addresses your current needs, but you should not limit your focus to the present. Try to think ahead and anticipate any variables that could arise in the future. Consider questions such as:

  • How often will we renegotiate the contract?
  • What circumstances could render the contract void?
  • What if the signee goes out of business?
  • What if one of the parties should die?

Anticipating potential roadblocks is one of the most effective ways of preventing contract disputes. It will also save you the headache of having to continually adjust a contract every time you hit a snag.

Require contracts to be notarized

No, having a notary sign a document does not ensure its legality. It can, however, make the counterparty think twice about what they are about to sign. If the other party knows that a contract is going to be notarized, it may prompt them to take a long, hard look at the contract’s details. In the event that you should go to court because of a contract dispute, it also prevents the other party from claiming that they did not sign the document.

Double-check their legal standing

One way to guarantee a messy legal battle is if it turns out that the counterparty is not who they say they are. That’s why you should always verify the counterparty’s identification. Otherwise, the contract could be rendered null and void. Always perform due diligence to verify the other party’s legal standing before they sign the contract. This will prevent messy litigation regarding the contract’s enforceability.

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