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3 tips to help you avoid a costly contract dispute

Litigation is an almost inevitable by-product of a successful business — but that doesn’t mean that you don’t want to take every step you can to avoid it.

One of the best ways to prevent litigation in the future is by thinking about it now, especially when you are drafting a contract. A little foresight can save you a fortune, while hindsight is usually an expensive lesson.

Here are some tips on how to avoid potentially harmful and expensive contract disputes:

1. Avoid vague or contradictory language.

This lesson comes courtesy of the contract dispute some contestants had with the Miss America Pageant. The rule in dispute probably seemed clear at the time it was written to those writing it: contestants had to be aged 17-24. However, did that mean a contestant aged out on her birthday or did she have until she turned 25? There’s a full year’s difference in meaning that could have been clarified with a little additional wording — which could have then prevented a $3 million lawsuit.

2. Always think about the future.

Nothing in business is static for long, which means that your contracts should reflect that reality.

Clauses can void a contract under the right circumstances. Automatic renewals could be dangerous unless there’s some plan in writing that will trigger a renegotiation. It’s difficult to plan ahead when you have to consider all sorts of variables, but that’s exactly what a good contract does.

3. Don’t let anything go unwitnessed.

If you don’t have a notary working for you, consider paying one of your employees to put in the extra work in order to become one. Alternatively, you can always use a notary service that comes out to your place of business. There are also notaries in many banks or attorneys’ offices that will gladly do the job for their clients.

Having a contract notarized helps make it legally enforceable — especially if there’s ever a question as to whether or not the signature on the contract is real. A notary’s testimony in court can carry significant weight.

For more information on how to prevent contentious litigation in the future by securing solid contracts today, consult an attorney with contract development and dispute experience.