8 Types of Corporate Contract Woes
There are two main types of bad corporate contracts:
The ones that are poorly written and don't accurately record all of the details
The ones that show unrealistic expectations.
Many businesses across the country experience contract disputes, which are often seen as the cost of doing business. When parties sign an agreement, they bind the parties together for a certain time.
The main corporate contracts are as follows:
Non-Disclosure Agreements (NDAs)
These types of contracts are fairly common especially when dealing with trade secrets or private information. There are many reasons why people should ask another to sign an NDA. One of these is safeguarding sensitive information that a potential buyer or investor could use to ruin a business model. This is one of the contracts where one can easily prove a violation occurred when a dispute arises.
Today, contracts are used by businesses to operate efficiently and state their terms from the onset. They are often drafted for various reasons: hosting a website, liability, and more.
A good example is when a party breaches a contract, they can be held legally responsible for the damages caused. Another example could be , if a business states they would provide 50GB of cloud storage and fails to provide the stipulated amount, it could be held responsible for the entire amount.
Some businesses require their employees to sign non-competition agreements when they start working. These contracts dictate that, once an employee breaks their relationship with the company, they cannot work for its competitor for a certain amount of time.
The lack of language in commercial lease contracts can cause disputes between the building owners and the business owners who rent space. One example of this is when the lessor enforces an unlawful detainer.
Sale of Goods Contracts
The Uniform Commercial Code governs many of the contracts involved in the sale of goods. These contracts are often disputed in transactions involving liquidated merchandise and wholesale sales. Some of these contracts provide for the performance of the goods or the customer to receive them.
Consumer Contract Disputes
This Contract protects the consumer when it comes to purchases and warranties. For example, when a business sells a used game console, it often comes with a contract that states that the seller has a right to resell it for a higher price.
A manufacturer then promises that the product will be defect-free and will refund the consumers' money if the item gets damaged. Unfortunately, many manufacturers fail to honor this promise and leave consumers with worthless products.
Not honoring a warranty can result in a consumer being left with a worthless product. This type of contract dispute is more common than other types of contracts.
General Material Breach
Material breaches are the failure to follow the terms of the contract. This type of contract dispute can raise concerns about properly drafting the contract.
The damages caused by a material breach can be very large. In most cases, the accused party could be held responsible for the entire amount.
How to Avoid These Contract Disputes
The language in contracts is as important as the people bound by them. Having the right lawyer can help avoid many contract disputes.
Even though it's impossible to predict when a party will break the contract, having clear and concise language can help prevent a breach.
Having the right lawyer can also help avoid costly mistakes. Doing your due diligence before signing a contract is also a must. We can help you get started on your contract writing journey.
Feel Free to visit our website https://www.thesdavislawgroup.com/ to book a consultation session with us.
©2022 by The S. Davis Law Group