It is often necessary for businesses to work with a number of other parties in order for their operations to succeed. Companies usually formalize these relationships through the drafting of a contract, a legally binding document that establishes the relationship between the two parties. Even the most accurate and well-prepared contracts are at risk for disputes and breaches. 

While the most complex contract disputes require litigation, below are some tips for preventing contract disputes before they end up in court. 

Establish specific criteria when creating the contract 

The best way to avoid contract disputes is to take extra care over the words used when you first draft and execute the contract. Expectations and goals outlined in a contract should follow the SMART principle: specific, measurable, achievable, relevant and time-based. The contract should clearly define expectations, as well as the penalty or consequence for unmet expectations. 

Notarize the document 

The only way to ensure that contractors follow the criteria outlined in the document is to properly execute the document. Have a certified individual review and notarize the contract. Notaries will often charge for their services, but it should not cost more than $25. Some bank employees and government officials will notarize documents free of charge. 

Keep accurate records 

After the execution of a contract, record any written correspondence between your business and the other company. If you ever find yourself in a contract dispute, records are essential and may be necessary to defend your business. Record the date, time and outcome of each interaction. 

Search for alternatives 

Occasionally, despite a firm’s best intentions, disputes are unavoidable. However, before you pursue litigation, try an alternative such as arbitration or mediation. These options may keep you out of court and are more cost-effective. When pursuing litigation becomes the only option, many people seek legal advice from an attorney with experience in contract law.