The Most Common Contract Disputes Likely to Lead to Business Litigation

by | Apr 28, 2016 | Business Litigation

Unfortunately, far too many business owners don’t realize the importance of a proper contract until it’s too late. The reality is that the more time and effort you put into structuring your contracts now, the less likely you are to wind up in business litigation later on.

Even though the majority of business relationships involving contracts do start off on the right foot, you cannot always count on this. It can be frustrating to realize that the other party has breached his or her duty with regard to the contract, but even more devastating to realize that you are unable to resolve this issue on your own.

Read on to learn more about the most common contract disputes that will likely end up in business litigation, and how a business litigation attorney may be needed to resolve an ongoing conflict.

Not Having a Contract at All

The biggest mistake you can make is assuming that the other party will act in good faith without a written contract. While this is certainly a possibility, it’s not one you should bank on. A written contract helps to clarify all issues about your relationship with this other party, and it’s not something you should ignore.

Make sure you carefully consider all the implications of working together as well as how you’ll resolve disputes if they arise.

Not Defining a Breach

You need to be able to act quickly if the other party breaches a contract, but this can be much more challenging if you have not clearly outlined what constitutes a breach.

In order to do this, think about the circumstances in which you’d want to end the business relationship. For example, if the other party does not pay, if the delivery is late, or if the quality of work or delivery is low, then you may want to consider terminating the relationship.

Having these terms explained in the written contract helps you to move forward and either encourage the other party to rectify the situation or form the basis of your claim for damages.

Not Thinking About Resolution Options

Business litigation is not your only option for resolving a dispute should one occur, but it might be the best venue for resolving an ongoing conflict. Some individuals prefer to put other terms in contract mandating arbitration or mediation.

One of the challenges with mediation, however, is that most business owners have already attempted to resolve things on their own before meeting with a business litigation attorney.

For example, if you’re unable to contact or connect with the other party in the contract, then it can be difficult and frustrating to try and determine the next steps. If you originally intended to work things out in mediation, then this can quickly turn into a dead end if the other party refuses to budge or simply does not respond. This is why you may want to include a clause in the contract about the point at which you would pursue legal action.

Failing to Consider Intellectual Property

Intellectual property is just as important of a business asset than property and equipment. However, even in today’s day and age, many businesses—particularly startups—fail to consider the importance of intellectual property.

What seems like a small mistake at the time the contract is created can be meaningful repercussions down the road, which is why your Florida business litigation attorney should carefully review all contracts before you sign anything.

Even if you suspect that you don’t currently have an intellectual property issue, you should have a contract that memorializes the assignment of intellectual property to the company. This is especially true for startups, and every person involved with the company should sign this document. It’s essential that the company own work created by those working for the business.

Not Calling a Business Litigation Attorney

Not calling a business litigation attorney after you realize your contract has been breached or if you are in amidst a business dispute that is quickly heading for litigation, then this can be one of the biggest mistakes you make.

Consulting with a Florida business litigation attorney is easy, and it can be a huge move in a positive direction to help you to figure out your next steps all while protecting your business along the way.


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