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The Three Most Common Contractual Disputes and How to Avoid Them

By December 4, 2019 February 10th, 2020 No Comments

There is a myriad of issues that can make an otherwise great contractual relationship go wrong. In this article we discuss the three most important ones we’ve found throughout the years:

  • Lack of, or insufficient paper evidence of the contract:

Believe it or not, one of the main problems is that we can’t find the actual contract. Whether it is finding signed version, all the pages, a paper at all or a version that the parties do not dispute that is the correct final executed version. It is extremely important that when you enter into a contract, whatever the terms, that you safely keep a good, complete copy of the original properly executed by both parties.

  • Breach based on non-payment or performance obligations:

This one is very simple. A party promised to do A, or to pay X, and does not do A or pay X. It is pretty basic. Sometimes, the party that does not come through with its contract obligations does not do it purposely or for malign reasons. But this is where the essence of the contract comes into play. The very purpose of the contract is to apportion risks between the parties, and have the party that performed, to have some recourse when the other doesn’t. In this sense, it is very important that the contract have very specific terms that say exactly what happens when one party does not perform. For example, do they get 10-extra days? Do they get a fee penalty and then we move on? Do they get a chance to cure the non-performance? If these type of terms are not specified well and properly written, one party may treat it as a serious breach (one that can’t be cure, and sue), and the other one, as a breach that should be permitted to fixed, and therefore, the party suing or terminating is the party breaching. Clarity is key in contracts. A good contract lawyer—fundamental.

  • Fraud:

We’ve encountered many instances of fraud in contracts that affect its very creation or that, in the alternative, gives a party a non-contractual cause of action based on deceiving tactics. In Florida, there is a law called the Florida Deceptive and Unfair Practices Act, which addresses situations like this. Typical fraud related problems in contract involve lack of disclosure of known situations, or while in a contract, taking information obtained during the contractual relationship and use it to compete unfairly.

For more information about contracts or for any contract dispute contact eayala@ayalalawpa.com, or call 305-570-2208.

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