Having written contracts can help businesses in a commercial relationship understand their respective rights and responsibilities. Unfortunately, even when these contracts seem ironclad, companies can find themselves in many types of contract disputes. Let’s explore some of the most common ones in detail, and explain how a Michigan business law attorney could help you resolve them.
Common Types of Contract Disputes in Michigan
Some of the most common examples of contract disputes between businesses in Michigan include:
- Breach of contract claims: If one of the parties in a contractual relationship failed to perform one or more obligations under the parties’ agreement, a breach of contract claim can arise. Frequent causes of breach of contract claims include missed deadlines, non-payment, or inadequate payment.
- Misrepresentation or fraud claims: If someone made false or misleading statements or material omissions that induced the claimant to enter a contract, the claimant can file a fraud or misrepresentation claim. Alternatively, such claims may involve allegations that a party included false representations and warranties in the contract.
- Ambiguities and interpretation disputes: Unclear contract language or differing understandings or expectations among parties can lead to legal disputes. For example, one party may believe they have certain rights or that the counterparty has specific obligations under the contract, and the other party disagrees.
- Non-compete or confidentiality provision violations: Business contracts may include non-disclosure, non-compete, or non-solicitation provisions. These clauses can lead to disputes when a party subject to a restrictive covenant allegedly breaches its obligations.
- Performance delays: Delays in payment or delivery of goods or services can lead to conflicts between businesses in a contractual relationship.
- Non-conforming performance: Conflicts can arise over defective goods, substandard work, and other quality concerns for goods or services delivered under a contract.
Methods for Resolving Contract Disputes
Businesses have several avenues for resolving a dispute over contractual rights and obligations, including:
- Informal negotiations and communications: Businesses may prefer to resolve contract disputes informally, as open communications can help preserve relationships and avoid additional litigation costs.
- Mediation: When informal negotiations fail, parties may agree to attend mediation, where a neutral mediator can help the parties understand the strengths and weaknesses of their respective positions and suggest aspects of a potential settlement.
- Arbitration: Many business contracts include clauses that require parties to submit their disputes to arbitration. In arbitration, parties can present their cases to neutral third parties in a trial-like proceeding to obtain a ruling that decides the dispute.
- Litigation: In complex or high-value disputes where a contract does not include a mandatory arbitration clause, parties may have to turn to the courts to determine the parties’ respective rights and obligations.
The Role of a Michigan Business Attorney
A business attorney can help companies with all aspects of a contractual relationship. First, an experienced business lawyer can help a company negotiate, draft, and review contracts they are contemplating. An attorney can identify potential risks in proposed contracts and suggest revisions that better protect their client’s interests. When a dispute occurs, an attorney can represent a business during informal discussions to resolve the dispute, evaluating settlement offers and advising their client on their legal options. However, when a dispute escalates to mediation, arbitration, or litigation, a business litigation attorney can advocate for their client at the negotiating table, in an arbitration hearing, or at trial.
Contact a Business Lawyer Today
Michigan businesses can have various disputes over contractual rights and obligations. If you’re facing a contract dispute in your business, don’t try to handle it alone. Learn more about your options for pursuing a fair and favorable resolution of your disagreement with a counterparty. Contact Herbert Machnik Law Firm today for a confidential consultation with a business law attorney.
