3 Contract Mistakes That Lead to Litigation

And how to avoid them.

In my practice, I’ve seen countless business relationships start with good intentions—only to unravel because of vague, one-sided, or incomplete contracts. When a deal goes bad, the contract is the first place everyone looks. If it’s not clear, enforceable, or aligned with reality, you may find yourself in a courtroom.

Here are three of the most common contract mistakes that lead to litigation—and how to avoid them.

1. Not Putting the Agreement in Writing

It seems obvious, but it still happens all the time: two parties agree to something verbally or over email, and never take the time to formalize it.

The problem:
Without a written agreement, there’s no clear record of what was agreed to—timelines, deliverables, payments, responsibilities, and more. That leaves the door open to misunderstandings or, worse, disputes.

The fix:
Put it in writing. Even a simple, plain-language contract is better than a handshake deal. If it matters to the relationship or involves money, get it down on paper—and have both parties sign.

2. Using Generic or One-Size-Fits-All Templates

Online contract templates are easy to find—but they often aren’t tailored to your business, your jurisdiction, or your goals. Worse, they may be outdated or legally unenforceable.

The problem:
Generic contracts often miss critical terms—or include clauses that don’t apply. I’ve seen business owners unknowingly sign away key rights, accept unreasonable liability, or create loopholes they didn’t mean to.

The fix:
If you're entering into an important agreement, have an attorney review or draft it. A contract that actually fits your situation can prevent expensive disputes later.

3. Leaving Out a Dispute Resolution Clause

Most contracts don’t anticipate problems—they assume everything will go smoothly. But if a dispute arises, your contract should say how it will be handled.

The problem:
Without a clear dispute resolution clause, you're left with few options besides going straight to court—often in a jurisdiction you didn’t expect.

The fix:
Include language that sets expectations: Will disputes go to mediation or arbitration first? Where will legal actions be filed? Who pays legal fees? A little foresight here can save you thousands in the long run.

Final Thought: Contracts Are Prevention

A strong contract isn’t about anticipating failure—it’s about setting clear terms so both parties know what to expect. If you’re unsure about an agreement or facing a contract dispute, I can help you review, negotiate, or enforce it before it becomes a problem.

Got questions about a business contract?
Let’s talk.

—
Steven Siegler, Esq.
Siegler Law Firm, P.C.
steven@sieglerlawfirm.com | (201) 298-3593