Business-related contract are becoming more and more complex. For example, everyday consumers are used to seeing a gargantuan contract to update their mobile phone software or setup internet and cable at their homes. It is not uncommon for contracts in various industries, such as construction, to have contracts reaching 500 pages or more. Essentially both sides are trying to protect themselves by using legal maneuvers in an attempt to control risk. Many business owners, inventors, and entrepreneurs understand that the best way to draft and review these contracts is to work with a trusted business contract attorney in Utah or the state in which their business is headquartered.
What can be done when a dispute arises?
Complex contracts are here to stay and have become commonplace to conduct business. Along with an increase in length, comes more opportunities to address potential disputes. A common resolution comes in the form of establishing an ADR or alternative dispute resolution. This is a contractual and mutually agreed upon the method in which disputes can be resolved without relying on a classic courtroom setting. As with any solution, there are potential pros and cons depending on a variety of factors. Below is a quick list of why setting up an ADR can be beneficial, as well as some potential drawbacks.
Benefits of arbitration
Agreements can be made on equal ground: A traditional legal trail comes with potential unknown and unpredictable outcomes. At the end of the day, neither side knows with absolute certainty how a judge or a jury will eventually decide. In the contract, both parties can choose and agree who will be an arbitrator, especially one that has experience in their specific industry or area of legal dispute.
A quicker turnaround time: Arbitration is typically less formal and more flexible in terms of scheduling. The discovery process is trimmed down and avoids large portions of gathering and submitting documentation. Most cases also do not necessitate or include expert witnesses or require as much legal preparation.
Potential drawbacks of arbitration
There are no appeals: The arbitration decision is final. This is something that is agreed upon and established during the construction of the contract. Even if one side feels they received an unfair outcome there is no formal appeals process available.
The limitations on evidence can be worrisome: Judges in a traditional court setting have specific regulations to follow in regards to accepting or denying the evidence. Arbitrators do not have as many rules guiding their decisions and can utilize almost any information that is brought to them. There is also a lack of cross-examination because arbitration generally relies on documents as opposed to witnesses taking away the ability to ask questions or clarify misunderstandings.
Have the right legal team on your side
The largest take-away from this article should be that business contractual legal matters are best left to the professionals. There are potentially miles of red tape, legal hurdles, and future implications of agreements to take into considerations. Although this article discusses arbitration, there are other means of resolving disputes that may be more ideal for your business or situation. If you need contracts updated, drafter or reviewed consider working with Bowen Law Professional Group. Our team proudly serves businesses of almost any size in Utah, California, New York, Florida, and Tennessee. Contact us today to speak with a legal professional at (801) 364-0123