Avoiding Breach of Contract Lawsuits

a lawyer in his office showing a document with the text lawsuit written in it

Breach of contract lawsuits happen when two or more parties have a disagreement about an arrangement they had previously committed in writing to a contract.  It does not matter if a party is an individual or a business:  both can claim a breach of a contract term or be on the receiving end of a claim.  However, litigation may not be the necessary result of a claim.  The issue is not the contract per se, but a dispute over whether one party failed to do something the other party believes should have been done.   Rather than a breach of contract lawsuit, there are, in fact, a number of ways that parties may resolve their dispute.

Going to court can be an expensive, lengthy process.  Individuals sometimes try it on their own (“pro se”), but for matters that rise beyond small claims court levels most people use attorneys.  Businesses have to be represented by attorneys.  Lawyers are not cheap.  Most of them charge hourly for their services (contingent fee representation is rare in contract cases), and most breach of contract cases take well over a year to resolve if they go to trial.  At trial, litigants are often surprised to find that they cannot tell their story in the way they would like, but only limited bits of it in a regimented way.  Lawyers should also advise clients that nothing is certain in litigation, since judges and juries are unpredictable.  I have never been a judge, but having arbitrated a number of cases, I can tell you from the other side of the table that what the decision maker thinks is important and persuasive is not always what the parties and attorneys do!

Most litigated cases resolve before trial anyway.  The parties may reach a compromise or find a different way to continue their business arrangements.  One of the ways they reach that point is through mediation, an out-of-court process that gives the parties the opportunity to craft a resolution of their choosing.  In mediation, the parties work with a neutral third party mediator who facilitates their discussions and in some cases the exchange of relevant information, gives them a forum to present their factual and legal cases to each other (including breach of contract claims and defenses) and, depending on the process, either allows them to find a solution or actively guides them toward one.

Other processes include early neutral evaluation – like mediation before all the discovery in a case is complete, but with the neutral advising how a court might respond to claims – and Collaborative Law, in which specially trained attorneys and, in some cases, a neutral coach-facilitator assist in highly structured negotiations designed to help the parties reach agreement.

One of the biggest advantages of mediation and other ADR processes is that the parties are in control of timing.  Rather than being at the mercy of a court’s docket, negotiations using these processes may be scheduled at the parties’ convenience.  Starting is as simple as making a phone call to a mediator’s or Collaborative Lawyer’s office.  Alternative dispute resolution allows the parties to save money while reaching a resolution much sooner than in a traditional court process like a breach of contract lawsuit.

Using a Massachusetts Business Lawyer to Facilitate Your Contract Negotiation

Most contracts are negotiated by lawyers with input from their clients. Sometimes, the clients negotiate the big dollar points themselves and then leave all the rest to their lawyers. If you will be having an ongoing business relationship with the other party to a contract, though, you might consider having a Massachusetts business lawyer facilitate the negotiation. It can be especially helpful if there are more than two parties to the agreement.

Contract facilitation is similar to mediation, but with a few twists. The parties hire someone who is completely neutral to advise them of the major points that should go in the contract and the range of options others use to address these points. The facilitator also helps structure the discussion so the parties can have direct conversations about difficult matters in ways that actually build a working relationship. If the parties wish, a facilitator who is also a business attorney can help write a term sheet or even a draft agreement.

The process is particularly useful with partnerships but can also work with strategic relationships and other kinds of contracts in which the parties will be interacting in the future.

The process starts by working with the parties to define their goals. For instance, is there one specific term that is giving them difficulty or are the parties more interested in overall organizational development to make sure their roles, rights and obligations are clear? Each situation then evolves in a slightly different way depending on the parties, the type of process they are seeking and what they want to accomplish.

Discuss your options with a trained dispute resolution professional who is also a business lawyer to see if facilitated contract negotiation is right for your situation.