What Happens When There is a Dispute over a Business Contract in Frederick, MD?

Contracts are legal tools or instruments that can be used to guide most business arrangements. Companies rely on these defined business arrangements to ensure their business operates predictably, with certainty, and therefore profitably.

When disputes arise regarding a business arrangement, it is valuable to seek the skills of a business contract lawyer, who can help reasonably resolve the dispute between the contract’s parties.


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What Is A Contract?

A contract is a legally binding promise or agreement between the contract’s parties. A contract can be written, spoken, and even implied by a party’s choices and actions. However, some contracts are only valid if they are defined and detailed in a written agreement.

For a contract to be a legally binding document, it must consist of these elements –

The Contract’s Parties Must Be Competent – A contract cannot bind minors or anyone who is deemed to have a mental incapacity.


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An Offer – one party proposes to either pay or do something. This proposed commitment, which may include specific terms, can be –

  • Accepted
  • Denied
  • A Counteroffer Can Be Made to the Original Offeror

Acceptance – The terms detailed in the written contract must be mutually agreed upon. Often, when both parties understand and accept the contract’s written terms, contract law refers to this as a ‘meeting of the minds.’

Consideration – The contract provides for each to give, so each party gains something of value. Contracts can even be written where one of the contracted parties agrees NOT to do something – like refraining from exercising a right for compensation.

Performance – Each party to the contract is required to fulfill their agreed-upon contractual obligations.


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Why Do Businesses Use a Contract?

The purpose of a business agreement is to define the terms that govern the specific situation or arrangement. It is critical for each party to understand the agreed-upon terms delineated in the business contract. Examples of a business contract include –

  • Joint Ventures
  • Partnership Agreements
  • Agreements For –
    • The Securing Loans & Financing
    • The Sale Of Goods
    • The Purchasing or Sale of
      • Intellectual Rights
      • Franchise Businesses
      • Products & Services
      • Leasing Property or Goods

A properly prepared business contract is essential to creating and maintaining a profitable business operation.

A well-crafted business contract can help avoid business disputes.

Business contracts can accomplish these objectives –

  • A written contract clearly communicates the scope and details of the arrangement to each party. The clearer the written agreement, the easier it becomes to identify each party’s contractual obligations.
  • The written business agreement is evidence that each party accepts the terms of the agreement. Ultimately, a well-written agreement can reduce confusion among the contracted parties.
  • A signed written agreement offers evidence of an existing agreement. This allows the agreement to be enforced should a dispute arise after it is executed by all parties.

Examples of Business Contract Disputes

Breach of Contract

When a contract is breached, one of the contracted parties has failed to meet their defined contractual obligations. A breach may be caused when one party refuses to perform, fails to perform, or by conditions set forth by one party, finds it impossible to meet their performance obligations.

To prove a contract breach, the following credible proof is required –

  • A legally binding contract existed.
  • You fulfilled your contractual obligations.
  • Another party to the contract did not fulfill their contractual obligations.
  • As a result of the contract breach, you suffered damages.

A breach of contract entitles the innocent contractual party to act and try to recover damages.

Types of Breach of Contract

Breach of contracts varies. While some have significant consequences, other breaches are relatively small.

Material Contract Breach

When a party materially breaches a contract, they have failed to comply with a significant term of the contract. When a party materially breaches a contract, their breach basically defeats the purpose of the contract. A material breach would be failing to pay for delivered products or delivering the wrong product.

Minor Contract Breach

A minor contract breach (a.k.a. an immaterial or partial breach) refers to an instance in which one contracted party does not meet a small obligation within the terms of the contract.

The remedies available for a minor and material breach may differ. Unless an aggrieved party in a minor breach can provide evidence of economic damages, a financial remedy may not be available. A minor contract breach would happen if you ordered 1,000 widgets for a delivery date of December 1st, and they arrive on December 3rd. Unless you can show verifiable economic damages for the late delivery, there is no legitimate basis for a lawsuit.

Actual Breach of Contract

An actual breach refers to a situation or circumstance in which some part of the contract’s terms has not been fulfilled on time or in the manner prescribed by the contract.

If you can demonstrate that an actual breach has occurred, you have several options to seek recovery of damages. An experienced business contract lawyer can detail the potential legal avenues available should an actual breach occur.

Anticipatory Breach of Contract

An anticipatory breach of contract refers to one’ contracted party’s communicated intentions that it will fail to fulfill its contractual obligations. It is possible that an anticipatory breach can end the other party’s performance obligations.

Demonstrating that the other contracted party intends to breach the contract creates grounds for the other contractual party to seek legal action.

Partnership Disputes

These types of contract disputes occur when partners are bound to a legal agreement but develop conflicting ideas about managing the business. Financial compensation and leadership responsibilities often cause these disputes in business.

Covenants Not to Compete

A business can ask employees to sign a non-compete agreement – a written document in which an employee agrees NOT to engage in similar businesses – in a certain location for a defined period of time. Non-compete agreements must be carefully drafted (and not too broad) to be enforceable.

Contract Dispute Lawyers Help Resolve Issues between Contracted Parties

Business contract attorneys understand how important it is to avoid contract disputes in business. More importantly, a business contract lawyer has the expertise to assist you in maintaining direct, effective, and clear communication in each business venture and opportunity – helping you to operate a profitable company.

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