Function of Contract Dispute Lawyers
Contract dispute lawyers are an essential part of resolving contract-related legal disputes. They act as advocates for their clients to ensure that their contractual terms are met and any breaches are remedied. The roles and responsibilities of contract dispute lawyers include:
Assessing the Contract
It is the contract dispute lawyer’s role to thoroughly review the contract in question and make an initial assessment on the issues and potential liability. This helps establish the best way to approach the dispute with the end goal of reaching an efficient and satisfactory resolution.
Negotiating a Settlement
Any time a contractual dispute arises , both parties’ motives typically lie in resolving the issue instead of pursuing legal action. It is the dispute lawyer’s responsibility to use effective negotiation tactics to explore all settlement options before involving the court system. In most cases, an amicable solution can be found if both parties are willing to consider alternative action and compromise.
Pursuing a Legal Remedy
Occasionally, it may be impossible to reach an agreement between the parties and it could then be necessary to pursue a legal remedy. When this occurs, it is crucial for your contract dispute lawyer to act as your advocate to guarantee that your rights are upheld and you receive the compensation you deserve.
Typical Types of Contract Disputes
The most common types of contract disputes involve breach of contract, misinterpretation of the contract, and failure to perform. You’ve likely heard the terms ‘breach’ and ‘non-performance’ used interchangeably, but they really aren’t the same-even if they are closely related.
Breach of Contract
In the case of a breach of contract, the contract has been breached by one of the parties. Perhaps that party has failed to do something they agreed to do within the contract. Or maybe they did something that was strictly prohibited in the contract.
Misinterpretation or Non-Performance
Non-performance, on the other hand, is when a party has not performed a duty or obligation within the contract. For example, if one party was supposed to provide a service and didn’t.
These terms can be used separately or together as well-especially if there is a large scope of work that was supposed to be completed but due to a breach or mistake on the part of one of the parties, completion of the work was not achieved.
There are many different types of contract disputes, but it’s probably always going to involve a type of breach of contract.
How to Select the Ideal Contract Dispute Lawyer
When it comes to contractual disputes, you want a lawyer who is not only well-versed in commercial and business law, but also one who possesses a depth of experience handling similar contractual disputes. An experienced contract dispute lawyer has handled a multitude of contractual issues mirroring yours, giving him or her the ability to cut through frivolous arguments, articulate your legal position, and give you sound practical advice.
Furthermore, an experienced contract lawyer will get the selected clause of your contract, which will be the most significant issue in any contractual dispute, and will help you to find the best resolution strategy, whether through negotiation, mediation, arbitration, or judicial process.
A lawyer’s reputation is a significant factor when deciding on one to handle your contractual dispute. You want a contract dispute lawyer who is highly respected within the community as well as in the legal field, as they will be more likely to have the ear of the judge and other attorneys involved in your case. Furthermore, you also want your lawyer to be respected and liked by the other parties involved in your case, as this will most likely affect how negotiations are handled and the eventual outcome.
For instance, an attorney known for being hard-nosed and unrelenting, who has a reputation for litigating cases to the ends, may not be the best option for you if your goals in the litigation are settlement-based.
On the other hand, a lawyer who has a reputation for being accommodating and who constantly looks for ways to meet others halfway may not be a good choice if the other party is difficult to deal with and likely to take advantage of your lawyer’s willingness to compromise.
In addition to their experience and reputation, you also want a contract dispute lawyer who has demonstrated specialization in this area of the law. For example, if you have a business dispute involving the sale of goods, you want to work with a lawyer who has demonstrated experience in dealing with the Uniform Commercial Code (UCC), the set of laws that regulates sales of goods across state lines.
You can easily find out about a lawyer’s specialization in the area by looking on their firm’s website or by simply asking the lawyer directly what their specialties are.
Client reviews are another thing to look at before hiring a contract dispute lawyer. You want a lawyer who has consistently received positive reviews from their clients, as this means that the lawyer is respected in his or her field, has a strong reputation, and consistently delivers favorable results for clients.
The Legal Mechanism for Resolutions of Contract Disputes
The legal process of resolving a contract dispute is generally composed of four steps: negotiation, mediation, arbitration, and litigation. Not all cases will go through each step, and not all cases will follow the same process of resolution, but this overview will help you navigate the legal resolution of your contracts disputes.
Negotiation
The first step in contracting dispute resolution is negotiation. Either through a representative, or on your own, you will open up the conversation to your contract dispute to come to a resolution that is preferred to litigation. This can follow the guidelines within your contract for resolving disputes, or be a more general conversation about your grievances with the behavior of the other party. While negotiation may not always be successful, it is often swift, and should be the first method attempted to solve your contract disputes.
Mediation
Mediation is an alternative form of dispute resolution, or ADR, that involves a third-party, neutral party to help both sides come to a peaceful and constructive resolution through a process called ‘assisted negotiation.’ The mediator attempts to bring both sides together, usually with some sort of incentives to communicate positively for at least an agreed amount of time, and either help both parties communicate effectively or mediates through a set of questions asked over several meetings until you reach an agreement. Mediation is a very popular method of resolving contract disputes because it usually saves both parties time and money from going to court.
Arbitration
If mediation does not work, or if your contract specifies that arbitration would be next, then the next step in your legal contract dispute resolution will be arbitration. The arbitrator uses guided negotiation to facilitate a termination or completion of the contract, and is often less formal with evidence than a judge would be. Arbitration is usually considered ‘nonbinding’, meaning that unless you specifically asked for a binding arbitration, the resulting agreement is not legally enforceable. This means that if either party does not comply, you are free to sue for breach of contract in a court of law.
Litigation
Litigation is the last resort for contract dispute resolution, and involves the suing of one party against the other in a court of law. This is usually the most expensive and time-consuming option for dispute resolution, but it is the only way to obtain a legally binding contract with specific terms for compliance by both parties. If brought to court, a party may demand discovery, which will allow the court to order the gathering of evidence. Once evidence is gathered, parties are called forward for a settlement conference to determine if the matter can be resolved without going to court. If not, then the court will enter into either a jury or a bench trial (before a judge only) for final judgement on how the contract should be upheld and complied with.
Advantages of Specialist Contract Dispute Lawyers
One of the key advantages of hiring a contract dispute lawyer is their ability to provide you with the guidance that you need in order to navigate through the complexities of such issues. Experienced lawyers have likely been through several contract dispute cases already and know how to create winning strategies that can help you in your case. Having this level of expertise by your side will empower you moving forward and give you much greater peace of mind as you work to resolve your legal matter.
Contract Dispute Attorney Fees and Costs
As with any service-based industry, the costs of hiring contract dispute lawyers will vary. Most lawyers do not charge a flat fee for an initial consultation, but the amount of time they work with you and the fees involved will be determined by the complexity of your relationship with the offending party and/or the contracts involved. However, there are some fees that you can expect in every case.
Hourly Rates
In Canada, the average hourly rate for lawyers is $285, although the region where you reside, the lawyer’s years of experience, and the size of the firm they work at will all factor into the cost. Larger firms also tend to charge more per hour.
Retainers
After your initial consultation, if you choose to enlist the help of the legal representative, they may charge you a retainer. In this case, a certain amount of money would be due immediately and they would put this amount in a trust account. Any bills that you incurred while using their services will be deducted from this amount. If there is money remaining in the trust account when the case is concluded, this money will be refunded to you. Conversely, if you exceed the retainer balance, you may have to pay additional funds to your lawyer.
Contingency Fees
This type of fee — which states that the lawyer will only charge their clients if money is recovered through the case — is more common in injury or insurance matters. Be sure to verify if the firm that you are dealing with accepts this type of fee. Many contract dispute lawyers do not.
Real-World Cases and Examples of Contract Disputes
In a recent case, the plaintiff engaged in negotiations with a large multinational corporation for the sale of his software product. After months of back-and-forth, an email exchange between the parties set out the terms of the deal. However, the email exchange was less of a formal offer and acceptance and more of a letter of intent describing the details of a future deal. The price of the product was outlined in the draft agreement, but no provisions were set out for what would occur if the deal fell through. When the software developer refused to sign the final agreement, a dispute ensued over the amount due to him for the software license.
What was helpful for the attorney representing the software developer was knowledge of Corporations Code section 15901.02, which allows corporations to enter into a written partnership agreement for the purpose of building and fostering new business opportunities. This statute provided a legitimate basis for the software developer to sue for breach of partnership , and the attorney successfully prevailed on all of the plaintiff’s claims.
Another example involves a client whose business was formed and run as a limited liability company ("LLC"). The client had formed numerous subsidiaries, all owned by the parent LLC. The client terminated the contractor at issue, and a battle ensued over whether the contractor created personal liability for the termination of the license agreement.
The client’s attorney was able to show that the operating agreement of the parent LLC made it the successor and assign of all of the subsidiaries. The attorney also located a case that stated that a contract signed in the name of an LLC where the contracting party was only an LLC, did not create personal liability for the employee and could not be individually sued for breach of contract. The case law established that a successor, including a parent company, was protected under assignment theory.