Why Do We Need Contracts?
Contracts are irreplaceable legal instruments we use in performing business transactions. With contracts (as binding agreements we enter with business partners, clients, suppliers, and employees), we have peace of mind knowing both parties agreed to fulfill specific actions or refrain from doing something. Without them, businesses face insecurity and risk.
Each contract must have the following elements to be valid:
- Offer – proposal of terms;
- Consideration – the reason why parties enter the contract;
- Acceptance – agreement to proposed terms;
- Intent – awareness of the terms and intent to enter into the contract;
- Capacity – ability to uphold the contract;
- Legality – the terms of the agreement must be lawful.
A Breach of Contract
A breach of contract occurs when one party fails to uphold their end of an agreement. Depending on the impact on the contract, there are two types of violations: non-material and material breach of contract.
- Non-material Breach. A non-material breach is a minor breach that occurs when non-compliance with the agreed terms is not critical enough to compromise its integrity (for example, minor delivery delays or delivery of inappropriate goods).
- Material Breach. A material breach is a crucial and irreparable breach of the agreement. It has a decisive impact on the existence of the contract. In case of a material breach, the other party has the right to collect the damages (refusal to pay the rent, several weeks-long delays in delivery).
Breach of Contract Remedies
Depending on the type of contract breach, Florida law provides the following legal remedies:
- Damages
- Restitution
- Contract Rescission
- Specific Performance
Resolving Contract Disputes in Litigation
When a breach of contract occurs, the conventional way of enforcing it is by filing a breach of contract lawsuit and initiating court litigation.
To prove a breach of contract claim, a non-breaching party must demonstrate that the contract is a valid and binding agreement between the parties. In addition, they must show that the non-compliant party failed to meet the terms and that such a violation resulted in monetary damages for the plaintiff.
Proving breach of contract allegations in court is a burdensome and time-consuming task. It can take months to get a hearing date. Fees and court expenses add during each stage of the procedure (discovery, opening statements, witness examination, and closing arguments), making litigation financially draining.
Contract Disputes Mediation
As an alternative dispute resolution method, mediation is the most suitable technique for dealing with contract disputes.
In addition to being a time and cost-effective method, mediation is neutral, voluntary, and confidential.
Neutrality
In mediation, a neutral third person (a former judge or an attorney) facilitates the negotiations between the parties. The mediator’s role is not to issue a decision to resolve the dispute. By enabling negotiations, the mediator helps the parties explore the causes of the conflict, leading them to a potential settlement.
Unlike litigation, there is no judge or jury in contract dispute mediation. Instead of the jury acting as a referee of facts and the judge controlling the procedure, the mediator helps the parties bridge their differences and reach an agreement.
Confidentiality
One of the dominant features of mediation is its confidentiality. Keeping contract disputes out of public record is crucial in any contractual relationship, especially in business contracts. The disputed parties are both interested in safeguarding their hard-earned reputation. Contrarily, litigation brings a lot of undue publicity.
The mediator conducts the process in a respectful and non-adversarial environment. Without needless vindictiveness, typical for litigation, the parties are more likely to continue their cooperation after the settlement.
Time and cost-effectiveness
There is no discovery, deposition, or witness examination in mediation. Consequently, the expenses are incomparably lower, making mediation an attractive alternative to costly litigation.
Stages of mediation
The mediation process has four stages: an introduction, opening statements, private sessions (caucuses), and joint sessions. In the introduction phase, the mediator presents their credentials. In opening statements, parties can offer initial remarks about the dispute. The mediator then talks to each party separately, going from one room to another to establish grounds for settlement. In joint sessions, parties gather with the mediator in an open discussion. Negotiations are the opportunity to bring offers and counteroffers.
The final goal of mediation is the reconciliation of opposing interests. The settlement, if signed, is enforceable as a binding contract.
Reach Out to Hal Wotitizky
Hal Wotitzky is a certified Florida mediator with years of experience.
Mr. Wotitzky’s dedication and persistence will bring your contract dispute mediation to the next level. Mediating between opposite interests, Hal adheres to the highest ethical and professional standards. His top priority is keeping an impartial role and strict confidentiality throughout the process.
Reach out today and schedule your mediation.