No Suits, Please.

• Author: Miller, Maxwell A.
• Position: Avoiding law suits

Five Ways to Avoid Legal Battles

Who sustains the most damage when individuals, businesses and organizations take each other to court?

According to a U.S. Bureau of Justice survey covering 1996 (most recent data available) trials in the 75 largest counties in the United States, individuals and organizations filing lawsuits against businesses won their cases in 62 percent of contract trials, and were awarded $900 million in compensatory and punitive damages. A resolution of such cases for the defendant businesses, from the filing of a complaint to the final judgment, can take years, making contract litigation a potentially severe drain, on personal or company assets.

For businesses wanting to save money on attorneys' fees, an ounce of prevention is worth a pound of cure. Following are my top five suggestions for how to prevent contract disputes and lessen litigation costs.

Signed Contracts: Worth a Thousand Words

Most contract disputes arise because there is arguably no prerequisite "meeting of the minds," especially as to what the customer or client expects a business to provide. A written agreement between the two parties helps minimize the possibility of misunderstanding. Moreover, a contract usually binds a party to the "four-corners" of the document and makes it impossible to use oral statements, which run contrary to the terms of the contract, as evidence in a court proceeding.

Although written documents can theoretically be voided because they are deemed unreasonable, this almost never happens. Contracts that banks, car dealerships and other businesses draft to protect them will usually be upheld in court over whining by customers or clients about the unfairness of the contracts conditions, Courts will usually advise complaining plaintiffs that if they don't like the deal, they shouldn't have signed the contract.

Contract Preparation: Act Like It Will be Litigated So It Won't Be

When preparing a contract, be sure to think like the courts do. Some of the more time-tested contract provisions that should be covered in a written agreement include:

1) Performance. Who is going to do what, when will they do it, and where?

2) Payment. How and when will payment be made?

3) Controlling Law. Whose laws will govern the contract should it be disputed in court, whether state or federal, and if by state, which state?

4) Forum. Assuming there is a dispute, where will the case be tried?

5) Default. What will define default of the contract and what...