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What is a contractual dispute?

What is a Contractual Dispute?

A contractual dispute is a disagreement between parties to a contract and can be based on the performance, terms or implementation of the contract. People will often assume that a contractual dispute must involve the breach of a contract but this is not always the case. A breach of a contract can result in a contractual dispute, but can also encompass other disagreements, including how a contract may be interpreted, or if one party wishes to amend the contract and the other refuses.

What Constitutes a Contract?

The three elements of a contract are: 

  • Making an offer
  • Acceptance of an offer 
  • Consideration, which is usually a payment in exchange for the goods or services provided as part of the contract

Common Reasons For Contractual Disputes

Contractual disputes can range from very minor breaches or issues to more significant issues. Often, a contractual dispute can relate to a breach that has not yet taken place, an example of this is when one party indicates that they do not intend to fulfil an important obligation detailed in their contract. 

Common examples of when contractual disputes can happen: 

  • A mistake or a disagreement over the terms within the contract, or the definitions used 
  • Issues that may arise following a contract review 
  • Noticed mistakes or errors within someone’s contract 
  • An allegation of the contract being breached, including when a party has failed to perform their duties under the contract 
  • Fraud
  • A dispute between employees and their associates

How to Avoid A Contractual Dispute

Draft Easy to Read Contracts 

One common reason for contractual dispute is when one party has misunderstood the contract’s terms. 

Ensure That Your Contracts Receive the Necessary Approval 

Contract disputes can also arise when internal stakeholders ask contract managers to act in a way that conflicts with the terms agreed. It is important to comply with the  terms of a contract or you can land in legal trouble. 

Work With Standard Contract Terms

Another effective way to avoid a contractual dispute is to standardise your contracts where possible.

At CP Law Associates we can give you access to template examples and assist you in drafting legally accurate contracts. 

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