Contract litigation – Houston Law Firm

Contract litigation – Houston Law Firm

Contract litigation is something that takes place in the courts. It is the process of resolving a dispute about the terms of a contract when parties fail to agree. Via the services of a skilled attorney, you can be able to negotiate on any disagreements or take it to a judge if negotiations fail. If contract litigation is not handled properly, it can break a company. That is why we at RunRex have prepared tips to help you avoid contract litigations. 

Define the parties clearly

Though it may seem like an obvious thing, many issues can make this quite a challenge. It has to be established that a signor to a contract is authorized. The guarantor of the terms of the contract also needs to be established. It is important to define who would be named in a case of a breach. 

Define what breach of contract is

A contract has to identify what constitutes fulfillment. It also has to define the duties and the conditions of those duties. This way, a failure to meet the conditions of the contract can be established.

Define the remedies

Whether it is financial compensation or complete cancellation of the contract, the remedies have to be stated. This way, the litigation process does not end up being drawn out and tedious. A lengthy litigation process can be quite costly. 

Identify all document and terms of the agreement

If you do not spell out what is included in a contract or what additional exhibits are included in the contracts it can be a loophole for fraud. Ensure that every tiny detail is included in the contract. 

Establish the rules of enforcement

This means a contract should indicate what measures will be taken if a dispute arises. This should indicate whether the arbitration will take place or the matter will be taken to court. 

Have it in writing

A contract does not have to be in writing to be enforceable. However, it is best to have a written record of the contract to help avoid disputes. This should also apply to any post-signing modifications too. 

Ensure modification rules are part of the contract

There should be a formal procedure established on how to modify the contract. In doing so, it may help you avoid continuing being a part of a contract that will ultimately hurt you. For instance, have a clause on modification due to delays in fulfillment. 

Use standardized language

In some industries, some terms are expected and meaning understood. However, avoid using too many industry-specific wording, even where it shortens the length of the wording. Use terms that are unambiguous. This way, you will not end up with wording that could be prone to misinterpretation before a judge. 

Understand any warranties 

If there are any warranties included in the contract, ensure that you understand their full meaning, especially in the context of existing laws. Otherwise, they may be unenforceable. 

Avoid carrying out any duties until the contract is signed

Do not engage in any activity until a contract has been signed. Otherwise, the other party may find a new partner, which may end up hurting you in the end. 

Know who you are dealing with

It is important that you check the background of anyone before you get into a contract with him or her. If it is a person-to-person contract, check their criminal record and other details. It is also important to check how they have behaved in the past dealing with other parties. 

Check the insurance

In most contracts, you will have some insurance. Check what things your insurer will cover if things do not go as planned. Do not allow anything to slip into the contract that might affect your dealings with the insurer. Ensure that all indemnity clauses are covered by an insurer or escrow funds. 

Define objective parameters

It is important to understand what satisfactory performance in objective terms is. For instance, if you are bringing an immigrant into the US, you need to define what will constitute as having performed well. Otherwise, you may end up with dead weight on your payroll. 

Consider other dispute resolution mechanisms

In the contract, ensure to include an alternative dispute resolution clause such as mediation or arbitration. Going to the courts can waste a lot of time and end up being quite costly. 

Ensure there is a liability clause

In any contract, you need to define the extent of liability. Otherwise, the other party may end up suing the entire company and potentially damage your company financially. 

Summary

Establishing a contract between two consenting parties can seem easy. However, if a dispute arises, all that goodwill disappears quite fast. It is essential that you follow these tips if you wish to avoid contract litigation. If you want to do this, it is important to hire a competent law firm such as ours from the start. This will enable you to create an ‘airtight’ contract.