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The Most Common Reason for Contractual Disputes

5/20/2009

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Some of the worst business disputes I have had to work on ironically involved people who, until that dispute arose, were very close to each other. Those were either close relatives or best friends who did business with each other, such as engaging in a partnership or another form of business venture, who did not feel comfortable asking each other to sign any agreements, and who were proud to agree on everything orally, believing that they will be able to work out any disagreement about their business in the future. 

The above approach to business often backfires and hurts all parties as oral agreements inherently have serious flaws that are bound to give rise to conflicts, fights, disagreements and lawsuits that could have been avoided if a proper written contract was drafted. Most people who enter into an agreement do not plan to deceive, defraud or steal from each other. The most common reason for business disputes is the fact that people simply did not outline and did not agree or reached a mutual understanding on many of the key aspects of their deal. Even the most simple agreement for consulting services is not as simple as it might look at first. For instance, John hired his best friend Brad to perform software consulting services. They agree on the start date and on compensation orally and believe that there is no need to sign any written agreements. Brad quits his job for the better and a higher-paying consulting position. Subsequently, several unexpected events might take place - John might change his mind a few weeks later and decide to not use Brad's services any longer; or Brad's services might prove to be unsatisfactory, or both simply feel that although they get along very well in social situations, they are not working together very well at all.  In this situation, the parties are left without any agreement on how they should go about terminating their relationship. Investing a few hundred dollars in drafting a proper consulting services agreement would have been well worth the effort and the expense.

At a minimum, a consulting services contract would provide for termination terms, any applicable penalties that each party might bear, and basic dispute resolution terms, among other important terms that clarify any possible misunderstanding that may arise between the parties and eliminate many ambiguity that are typical in business agreements.

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Law Office of Arkady Itkin - San Francisco & Sacramento Injury and Employment Lawyer
We represent employees and employers in employment and wrongful termination cases, as well as victims of serious injuries in San Francisco, Oakland, Sacramento, San Jose, Palo Alto, San Mateo and throughout Northern California. We all represent businesses and start-ups in a wide range of business and employment issues and disputes. 


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  • Home
  • Employment Law
    • Wrongful Termination >
      • At-Will Employment
      • Termination After Unfair Warnings and Write-Ups
      • Union Grievance, Workers Comp and Wrongful Termination
      • Labor Code 970 Claims
      • Promissory Estoppel and Employment Contracts
      • Implied Contract Claims
    • Discrimination >
      • Proving Discrimination
      • Age Discrimination
      • Disability Discrimination >
        • Protected Disabilities
        • Medical Leave / Disability Accommodations
        • Job Reassignment As A Disability Accommodation
        • SSI Disability Benefits and Your Court Case
        • Sample Request for Reasonable Accommodation
      • Pregnancy Discrimination
      • Race Discrimination
      • Sample Discrimination Complaint
      • DFEH and EEOC Investigations
    • Retaliation >
      • How to Prove Retaliation
      • Dealing with Retaliation While Still Employed
      • Retaliation for Complaining
      • Whistleblower Retaliation
    • Harassment
    • Defamation at Workplace
    • Prof. License Defense
    • Leaves of Absence >
      • Medical Leave as Reasonable Accommodation
      • FMLA Entitlement and Reinstatement to Work
      • CFRA Leave
      • Employers' FMLA Notice Obligations
      • Paternity Leave (FMLA)
      • Sample FMLA Leave Request
    • Wages / Overtime Claims >
      • Wage Claims
      • Employee or Contractor
      • Exempt / Non-Exempt >
        • Admistrative Exemption
        • IT Support Specialists Compensation
        • Computer Professional Exemption from Overtime
        • Recruiters / Account Executives Exemption
        • Complaining About Being Misclassified
      • Vacation Pay / PTO
      • On-Call Time Compensation
      • Deductions fr. Commissions
    • Unempl. Benefits Appeals >
      • Tips for EDD Phone Interview
      • Unemployment Benefits Appeal Hearing Representation
      • CUIAB Hearing Tips
    • Employment Law Blog
    • For Employers
  • Personal Injury
    • Five Tips For Injury Cases
    • Slip-and-Fall Injuries
    • Assault and Battery
    • Recorded Statements
    • Repairing Your Vehicle
    • Unpaid Medical Bills
    • Injury Law Blog
    • Medical Malpractice
    • Police Excessive Force
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  • About
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  • Submit Case
  • Contact
  • Resources
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    • Workplace Investigation
    • Arbitration
    • Statutes of Limitations
    • Healthy Litigation Mindset
    • Trial Tips
    • Working Remotely
    • How To Find The Right Lawyer For Your Case