Introduction
A contractor delays your store’s renovation, or a freelancer delivers subpar work. Industry-specific contract issues can cripple your business if not handled right. Disputes in construction, freelancing, or real estate can have unique challenges. This post guide explores common contract problems in these industries and how to avoid them. By tailoring contracts to your field, you can prevent costly disputes and keep your business running smoothly.
Construction: Delays and scope disputes are common. A contract might promise a renovation by June 1, but if the contractor misses the deadline, it’s a material breach. To avoid these issues, contracts should include clear milestones (e.g., “foundation complete by April 15”) and liquidated damages clauses for delays (e.g., “$500 per day late”). On the other hand, construction contractors must be careful when agreeing to take on the project. Delays in the industry are common, often outside the control of the contractor (i.e., material delays, labor shortages, etc.). A well-drafted contract at the outset of the relationship sets the expectations going forward.
Freelancing: Misunderstandings over deliverables or payment terms spark disputes. The deliverable might not be to your liking, but if the contract doesn’t specify revisions, you might be stuck. Similarly, the freelancer may have produced something that he or she believes meets all the contract specifications, only to be told to rework it for some vague reason. To mitigate this, your contract should include detailed scopes (e.g., “three logo designs with two revisions”) and payment schedules.
Real Estate: Disputes often involve earnest money or closing terms. A vague contract may not protect either the buyer or the seller. Use escrow agreements and specify conditions (e.g., “$10,000 deposit refundable only if financing fails for reasons outside the buyer’s control.”).
Protect your business with these five tips:
- Customize Contracts: Include industry-specific terms, like milestones for construction.
- Clarify Deliverables: Specify outputs, like “five blog posts” for freelancers.
- Use Escrow for Real Estate: Protect deposits with clear refund terms.
- Add Dispute Clauses: Require mediation to avoid lawsuits.
- Consult a Lawyer: Ensure contracts fit your industry’s needs.
Conclusion
Contracts are not one-size-fits-all. By tailoring your terms to your particular situation, such as the construction, freelancing, or real estate contracts mentioned here, you can avoid future problems. Visit Revolution Law for more insights, and consult a lawyer for industry-specific advice.
Revolution Law Group is located in Greensboro, NC, and serves individuals and small businesses throughout the Triad and surrounding areas. To contact us please visit Revolution.law or call 336-333-7907.
The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice, and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.
Contract Dispute FAQs
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Why do contract disputes differ by industry?Industries like construction, freelancing, and real estate have unique needs, like milestones or escrow terms, as the blog explains. Clear terms prevent or reduce breaches.
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What's a common contract issue in construction?Delays are frequent. Include milestones and liquidated damages clauses to avoid disputes.
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How can freelancers avoid contract disputes?Specify deliverables and revisions in contracts. Clear terms prevent misunderstandings.
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Why are real estate contracts prone to disputes?Vague terms or missing escrow agreements cause issues, especially since real estate contracts must be written under the Statute of Frauds.