Business Contracts - Avoiding and Resolving Disputes

Sometimes business contract problems are just like pulling teeth. In this case, the dispute is between a contractor and a dentist, in Phoenix, Arizona. As reported by a blogger for the Phoenix New Times, the contractor is staging a public protest because he says the dentist isn't paying his bills for the work the contractor has done. I'm guessing the problem is the contract.

One point I make with clients all the time is: "If it's not in writing, it doesn't exist." I don't know for sure, but I'm betting this dispute is about something that isn't in writing. Even if you have the basic essentials of the contract, something might still cause the situation to go bad. That's why we have contracts in the first place. So how do you protect yourself and your business against these kinds of situations? First, some suggestions on how to avoid this kind of ugly situation in the first place. Second, some dispute resolution services you can use when things go wrong:

Avoiding Contract Disputes

• Use an Attorney
  People who try to write their own contracts may get by with them occasionally, but when things go wrong, as in this case, they realize they should have hired an attorney. But then it's too late. Use an attorney for the contract in the first place. If you think you can't afford an attorney, think how much more expensive the dispute will be.
  
  
• Make Specific Statements
  Most contract disputes come from poorly worded statements. Vague terms, like "occasionally" are meaningless. I recently saw an employment contract that stated: "Employee will receive $3,000 in salary." Is that $3,000 a month? A week? A year? There is no such thing as too specific.
  
  
• Include Recourse
  Provide a way for either party to receive payment or some process to recover what is owed. Describe what happens if one party fails to fulfill its promises. In cases like this, where one party pays for the work of the other party, there should be a contract provision that details what the contractor could do if the client failed to pay. The client (dentist) should have a way to recover payment or other remedy if the contractor fails to do the work. I'm not saying this will prevent all problems, but it gives the parties a way to work through them without having to resort to protest.

Dispute Resolution Services

• Better Business Bureau
  The BBB's dispute resolution service is an informal process to help resolve complaints. While this service is primarily for customer complaints, it might work for a contract too.
  
  
• Mediation Services
  Mediation is an alternative dispute resolution process which brings the parties together to see if they can come to agreement. While there are pros and cons of mediation, it might help keep a case like this out of the courts. Either party can contact the American Arbitration Association for more information or to file a case.

Writing a tight contract (no holes to "fill") can benefit both parties and prevent you from having someone standing outside your place of business with a protest sign in hand.