How Are Business Disputes Prevented?
There are several ways to help minimize the risk of becoming involved in a business dispute.
Draft Effective Contracts
One of the best ways to head off any future disputes is to ensure you have effective, legally-binding contracts in place. Limelight Law can draft carefully written, clear, and specific contracts for your business. Our tailor-written contracts protect your interests and put you in the best position when navigating business deals. Some examples of contracts Limelight Law can assist you with:
- Affiliation
- Employment
- Influencer
- Non-Disclosure
- Licensing
- Sale/Purchase
- Service
- Sponsorship
- Technology - SaaS, Master Services
- And many others
Seek Advice Early
If you are unsure about how to approach a complex issue or if you have a gut feeling that something is not right, seek advice from a business attorney straight away. Obtaining legal advice at an early stage on how best to proceed helps you to avoid a business dispute.
Document Everything
It is best practice for a business to keep a written record of important documents or events in case a dispute later arises. This includes retaining copies of all emails, contracts, accounting information, loan documents, file notes, and meeting minutes. A business attorney can assist you with developing a good document retention strategy and system.
Breach of Contract and Non-Performance
A contract is a legally binding agreement between two parties, where one party offers to do something—for example, build a new house—and the other party accepts the offer and promises to do something in exchange—for example, pay money. Contracts in terms of businesses are used, for example, when:
- Setting up a commercial lease
- Entering into a licensing agreement
- Entering into a purchase agreement
- Hiring new employees or contractors
- Creating any other type of business agreement, like partnership agreements, indemnity agreements, non-disclosure agreements, etc.
If one party fails to perform their obligations under an agreement without a reasonable excuse, the other party may be able to sue them for breach of contract.
To do this, the contract must be valid—it must be legal and both parties must have the capacity to enter into it. A contract is also usually written, although a breach of contract can apply to a verbal agreement in certain situations.
Where a party sues for breach of contract, the party that fails to perform their obligations is called the defendant and the wronged party is called the plaintiff.
Questions before getting started? Get in touch.