Payment delays, non-payment and other types of issues can trigger legal problems for Texas business owners and their vendors. This is an area where the old saying “an ounce of prevention is worth a pound of cure” is especially relevant. There are several things you can do to avoid business disputes before signing vendor contracts.
When you sign a valid contract with one of your suppliers, you create a legally enforceable document. It is critical for every person who signs a specific contract to fully understand its contents, as well as the obligations implied by the same. When all signature parties understand and agree to the terms of a vendor contract, there is less room for confusion or disputes.
Additional factors that help avoid business disputes with vendors
When you’re preparing to execute a vendor contract, keep the following key issues in mind to help you create a solid agreement:
- Aim to create a win/win deal — that is, a deal that enables both you and your supplier to achieve your objectives. Understanding that each of you has a unique set of goals can help negotiate agreeable terms that are unlikely to spark a dispute.
- Develop a relationship with your vendors based on mutual respect and willingness to cooperate to achieve both immediate and long-term goals.
- Documenting all correspondence is a key factor toward resolving any business disputes that arise in a swift and amicable fashion. This includes recording dates and times for phone calls and keeping copies on file of all emails, text messages or written correspondence.
- Spell out details regarding important issues in a contract, such as pricing, payment deadlines, penalties for non-payment and details regarding the agreed-upon process for dispute resolutions.
Keeping detailed records of all vendor contracts, as well as all correspondence between your business and your distributors or suppliers helps lower the risk for business disputes. Remember, the more detailed and precise a contract is, the less room there is for disputes. Ambiguity, vagueness and lack of detail place vendor contracts in a high-risk category for business disputes.
Protecting your interests when vendor contract problems arise
To initiate the dispute resolution process, you must first make sure you have correctly identified the cause of the dispute. Was it miscommunication, human error or a breach of contract? From there, you can negotiate a solution using whatever dispute resolution option best fits your needs, including mediation, arbitration or litigation. To ensure that you employthe most viable option to protect your business interests, it is helpful to enlist support from an experienced negotiator who can review your contract and guide you through the dispute resolution process.