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5 Key Dangers of Not Signing a Contract

5 Key Dangers of Not Signing a Contract

The Miami civil litigation lawyers at Pimentel & Castillo have represented countless clients whose cases could have been avoided if only they had operated under a well-constructed contract. The purpose of a contract is to legally hold all parties engaging in business with one another to agreed-upon terms. When one does not exist or is simply not signed, navigating the process of holding another party accountable should those terms be broken is far more difficult. Often, it involves a civil trial that could have otherwise been avoided, costing the party who is not at fault both time and money.

Here are five problems that can be avoided by signing a contract.

1. Unclear Expectations

The only way to judge the success of an outcome is to weigh it against what was expected. If expectations are not clearly communicated by all involved, the likelihood that one of the parties will be left unsatisfied is much greater than if a signed contract outlines what is to be expected.

2. Payment Issues

If a business renders a service, getting paid for that service is expected. Yet, without a contract detailing how much will be charged and when that amount must be paid, clients or customers may be uncooperative. A contract benefits the party receiving the services in this scenario as well, by providing legal protections from additional charges that aren’t noted in the signed agreement.

3. Difficulties Understanding the Law

Very rarely are the parties entering into an agreement legal experts. A contract drawn up by an experienced contract attorney provides a legal framework for the agreement. This makes clear the obligations of all involved and who exactly is liable for what. More importantly, it helps the parties understand if they have legal standing for a dispute should problems arise.

4. Lack of Trust

All relationships are built on trust, whether they be business or personal. A signed contract can help establish this trust, giving all parties a clear understanding of what can be expected from them. Additionally, it provides a reference point for any questions that may arise.

5. Lost Disputes

When there is no signed contract to fall back on, the odds that a dispute will arise increase significantly. Without a written agreement, the party who is not at fault will likely need to seek legal recourse in this situation. In the worst case scenario, the party could lose the dispute due to a lack of legal framework outlining the terms.

Whether you need assistance drafting a solid contract or representation in a civil trial, our Miami civil litigation lawyers are here to help. Give us a call today to schedule a free consultation with one of our skilled attorneys.

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Governing and Jurisdiction Clauses in Contracts Q&A

Governing and Jurisdiction Clauses in Contracts Q&A

A contract represents a legally binding agreement between two or more parties. However, even when all the parties sign on the dotted line contract disputes may still come up. When a dispute occurs and both parties have chosen to resolve it through civil litigation important questions come up, particularly when the two parties operate in different states. Where will the case be heard? Who will interpret the contract’s terms and based on what set of laws?

To significantly reduce the possibility of a lengthy and expensive dispute, it is advisable to get ahead of the problem by answering these questions before contract disputes arise by enlisting the expertise of a Miami civil litigation lawyer during the drafting of any contract. They will be sure to include both a Governing Clause and Jurisdiction Clause.

What is a Governing Clause?

The first step in determining which laws will be applied toward the resolution of contract disputes is to include a governing clause (also called choice of law clause) within the contract. Laws, especially those governing business contracts, vary by state. So, there may be various legal interpretations of the same contract depending on which state laws are applied. By including a governing clause, both parties agree on which state’s laws will govern the contract and interpret its terms should a dispute arise. Governing clauses are especially important when the parties signing the contract, such as businesses, are operating in separate states.

What is a Jurisdiction Clause?

Once a governing clause is agreed on, it is now time for the parties to choose which court(s) will have the right to hear any resulting contract disputes. This agreed-upon condition must be explicitly stated in the form of a jurisdiction clause (also called forum selection clause). By including a jurisdiction clause, both parties establish and agree on which court(s) will hear and decide on any disputes that arise from the contract. The jurisdiction clause and governing clause do not necessarily have to match, a specified state court can be made to apply laws from another state. There are two types of jurisdiction clauses.

      • Exclusive Jurisdiction — Only the court(s) specified in the clause have the right to handle contract disputes. Parties must litigate their case in those specified courts.
      • Non-Exclusive Jurisdiction — Both the specified court(s) and other courts not explicitly stated in the clause can handle disputes. Parties can choose to file their lawsuit in these unspecified courts.

Governing and jurisdiction clauses must be written precisely to prevent any misunderstandings and disagreements over jurisdiction in the future. The right choice of state laws and forum can also benefit a party and help them avoid disadvantages such as costly out-of-state litigation or unfavorable state laws. Consult with an experienced Miami civil litigation lawyer to ensure both these clauses, as well as the contract itself, are properly drafted.

At Pimentel & Castillo, our Florida civil litigation attorneys are skilled at drafting contracts and representing our clients in contract disputes. Call and request a free consultation with our experienced Florida civil litigation attorneys today.

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A Guide to Winning a Contract Dispute

A Guide to Winning a Contract Dispute

For most business owners, a disagreement over the terms of a contract is likely to arise at some point. Without an effective strategy in place, such disputes can quickly prove costly. Therefore, understanding how to ensure the outcome is advantageous is absolutely essential.

Whether filing a suit over an unfulfilled partnership agreement, or battling one over employment contracts, here are some tips for coming out on top.

Preparation is Key

The best defense (or depending on the situation, offense) to a contract dispute actually lies in what the business owner does before the contract is even finalized. By making certain every contract one signs is clear in what is expected of each individual or company, a business owner guarantees any litigation later on is easily settled. The best way to avoid using language that may be open to interpretation is to enlist the services of a Miami contract attorney who will properly draft the terms of any agreement. Ideally, every question that could potentially arise should have an answer laid out in the contract itself.

Create a Paper Trail

Once the specifications of the agreement are laid out, it is of course important that both parties fulfill their obligations. Should the other party fail to do so, a business owner will improve his or her chances of winning a dispute with a paper trail demonstrating the unfulfilled obligation(s). Parties should always discuss amendments to an agreement or concerns with the other party’s performance via written communication, with any changes signed off on by both individuals.

Enlist a Qualified Attorney

In a perfect world, contract disputes would all be resolved before escalating to a formal civil suit. Of course, that is not the case; thus, recruiting an experienced Miami contract attorney to handle the dispute is critical to securing a favorable outcome. One’s lawyer can best advise him/her on how to proceed, and ensure all bases are covered to win in court.

If you are currently dealing with a dispute over a contract agreement, our team is here to guide you through it. Call us today to get started.