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3 common mistakes that can result in business litigation 

On Behalf of | Sep 14, 2021 | Business Law |

Ensuring that solid contracts are in place is fundamental to the efficiency of your business. Lengthy and profitable business relationships can be retained by putting steadfast agreements in place. However, creating unfaltering business relationships is not always easy and contracts can go wrong. 

One consequence of failed contracts is civil litigation. This can be stressful, time-consuming and expensive. Therefore, being aware of common factors that lead to contractual disputes could be beneficial. Outlined below are three common mistakes that may lead to litigation: 

Drafting one-sided contracts

Contracts that only take your own interests into account can be counterproductive. Firstly, they will likely discourage people from entering into business with you at all. Furthermore, if the matter is disputed in court, the judge could disregard the agreement altogether on the basis that it is an unconscionable deal. 

Having a poor understanding of the law

No matter how precise the terms of your contract may be, they must abide by the law. If not, then the agreement may be invalid. Furthermore, you could be held liable for any violations contained within the arrangement. Therefore, it is vital that you have a firm understanding of the law before the commencement of any contractual drafts. 

Ambiguously drafted terms

Often, people enter into agreements simply by emailing one another or sending a text message. This can work out — but it is not ideal in business scenarios. Mere text messages or emails will generally not contain the legal formalities of a written contract. As a result, you may not be sufficiently protected, and the agreement could be thrown out by the courts. 

Familiarizing yourself with the law relating to business contracts is in your best interests. Recognizing the common factors that can result in litigation will help protect your legal rights. 


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