When two or more parties enter into a business agreement or partnership, a series of terms and timelines must be negotiated and agreed to. Most often, these negotiated terms are set in a written contract. While contracts are meant as binding documents by which each respective party must adhere, sometimes disputes can arise.

Whether you are a real estate developer, construction contractor, or involved in another commercial venture, contract disputes can mire your project in commercial litigation.

When drafting your contract agreement, there are certain clauses that can mitigate or even completely prevent contract disputes from arising. These clauses are essential for avoiding disputes that can send your project off the rails.

5 Essential Clauses to Avoid Contract Disputes

Key Terms

A strong contract relies on the key terms addressed within it. If there is not a clear application of key terms, such as deadline dates and terms of payment, dispute resolution becomes much more complicated.

Integration Clause

An integration clause establishes your contract as a final, complete agreement. Despite prior agreements, whether they be oral or in writing, an integration clause signifies the agreement in which it is included to be the final binding contract.

Alternative Dispute Resolution

When drafting a contract agreement, you would be wise to include a dispute resolution cause indicating the preferred method for settling contract disputes, should they arise. Alternative dispute resolution, such as arbitration, can be an efficient and cost-effective resolution option rather than traditional litigation.

Preference of Law and Venue

If an alternative dispute resolution cause is not applicable or practical, you should at least include an agreed upon preference of law and venue for settling contract disputes that may present themselves down the line. An established legal language and venue makes clear to all parties involved the proper procedure and location for settling disputes.

Attorney’s Fees and Costs

In most cases, attorney’s fees are only granted if explicitly stated in the contract, or for preexisting state statutes. Having a clause in your contract that awards attorney’s fees to the prevailing party can protect you on two fronts:

  1. Breaching parties may think twice about bringing false or frivolous suits against you
  2. You will not be responsible for covering attorney’s fees should you need to bring an enforcement suit to settle a dispute