I know what you are thinking: ‘why should I consider disputes when I am entering a contract?’  But unfortunately, things don’t always go to plan. And sometimes people or companies don’t do what they say they were going to. So here are some things we as dispute lawyers see regularly and how you can ensure that you are dispute ready (fingers crossed you don’t need it!).

1. Check the Contract Details are Correct

We know it seems obvious but be clear on who is actually entering into the contract. You’d be surprised how it can be difficult later down the track to determine and prove who actually entered into a contract. Are the company details accurate? Where possible, ensure that each party signs the contract. More often than not in the age of electronic correspondence, it doesn’t happen!

2. Keep a Record of all Relevant Contemporaneous Documents

A contract isn’t just signed. Parties typically exchange correspondence leading up to discussions about the contract’s terms. If a dispute arises regarding terms, then contemporaneous documents can assist in determining what the parties actually agreed to.

3. What are the Payment Terms?

If you are the party paying the money, be sure that the payment terms accurately reflect the agreement you have reached, and that you can legitimately keep to them. Also, check the consequences of what happens when you can’t. Conversely, if you are the party expecting payment, make sure you can take action under the Agreement.

4. What Do You Do if There is a Dispute?

The contract should clearly spell out what happens if a dispute arises between the parties. Do the parties want to attempt a form of alternative dispute resolution before the matter is litigated? If so, what is the mechanism for this? What jurisdiction will hear a dispute? In the age of international deals, parties need to be aware that commencing proceedings or enforcing proceedings against a foreign entity can be costly, and time consuming. Pre-planning at the time you enter the contract will ensure a more streamlined dispute process.

5. Is There a Clear Exit Strategy?

If you are in dispute with a party, you might want to opt out of the contract. Commonly, contract’s contain ambiguous terms regarding how and when a party can terminate the contract. Working out how parties can terminate a contract at the outset is far easier than when parties are engaged in a dispute, and are unlikely to consider each other’s position. Trust us – you don’t want to end up in a long-running dispute about whether the contract was correctly terminated or not.

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Before you sign a contract, ensure that you are comfortable with the terms, and try where possible to foreshadow any possible issues that may arise between the parties. It’s too late once you’ve signed up and are engaged in a dispute to try and undo contractual terms. We see the full gamut of contracts – from big to small, complex to simple, good and bad. If you need assistance with your contract dispute, or drafting your Agreement to include a dispute resolution clause, let our disputes team know on 1300 544 755.

Emma George

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