When developing contracts and agreements, the consensus tends to be, “the more money we make, the better the deal.” The minutiae of compensation and services are still important, but sometimes they cause people to overlook what is arguably the most important part: the dispute resolution clause. These clauses wield significant influence over the future trajectory of all business arrangements and relationships. Not giving dispute resolution clauses the attention they deserve could wind up costing your business more than it made on the deal.
Money is Great, But…
Traditionally, even the most experienced entrepreneurs tend to focus on the immediate concerns–how much they will be paid and when. It’s natural, a business does not run on hopes and dreams. It runs on revenue. More often than you may think, the best way to guarantee that you get all the revenue you bargained for is to make sure the contract clearly spells out how disputes will be handled. This is usually found in a disputes resolution clause. Make sure you read it and you understand it!
Each individual’s circumstances will have different needs, but generally, experienced attorneys will be searching for the clause that waives a jury trial. This can be a huge benefit to all involved parties. By waiving the option of a jury trial and instead agreeing to a bench court, can open the door to potentially smoother and more cost-effective resolutions. Disputes have the potential to drag on for years and leech funds that could be used for much more important matters. A properly executed dispute resolution clause can lead to settlements that are more feasible, less expensive, and timely.
Crafting Resolutions Before Disputes
Some may consider approaching contracts and agreements from this perspective as pessimistic or prematurely confrontational. In reality, the opposite is true. Creating a fair and concise dispute clause shows that both parties not only take disputes seriously but their future relationships as well. It’s unlikely that two companies, even if they were mutually profitable partners, engaged in an expensive and time-consuming court battle will be able to collaborate effectively in the future.
Based on this principle, the intricacies of the dispute resolution clause matter tremendously. Working to ensure that disputes are resolved quickly to avoid delays that lead to additional expenses and agitating relationships is a proven approach. To accomplish this, there has to be an emphasis on equity. If the clause has all the key desirable elements to protect the interests of only one party, it can be equally damaging as not addressing the dispute clause in the first place. If one party is overburdened with expenses or additional effort, it does nothing to preserve the relationship both parties worked so hard to achieve.
Determining whether you’re facing the real threat of litigation or just a simple misunderstanding about the terms of a contract is best done with a trusted attorney at your side. The legal team at The Griffith Law Group, PLLC, understands the significance of strategic dispute resolution and collaboration. Together, we can create an efficient and cost-effective dispute management strategy by ensuring that it aligns with the broader objectives of your business. If you’re ready to move forward with air-tight contracts, schedule a consultation by calling (202) 499-5160.