Seven Tips to Prevent Contract Disputes

Meeting with a potential vendor, everything seems perfect, but after a few weeks, a conflict arises. This cycle of contract disputes can feel inevitable, but it doesn’t have to be. By following these strategies, you can establish smooth, trouble-free relationships with your vendors.

Start right

Selecting the right vendor from the outset is crucial. Even the clearest contract won’t help if the vendor isn’t suitable. Ensure you’re considering vendors who are licensed, bonded, and insured. Consult your local Chamber of Commerce or the Better Business Bureau for more information about potential companies. Property management firms might also have recommendations from their supplier databases.

Get it all in writing

It might seem obvious, but everything must be documented in writing. Even after a contract is signed, discussions about additional services may occur informally, leading to assumptions. Remember, only what’s written in the contract is valid. Insist on seeing all agreements documented, regardless of the stage in the process.

Don’t be afraid to ask questions

There are no trivial questions when it comes to contracts. Misunderstanding the terms due to complex language can lead to assumptions. Always seek clarification if needed. Contract jargon can be confusing, so it’s wise to ensure you completely understand it.

Review it with your committee or board

Never handle contract reviews solo. When you have a contract in hand, bring it to your committee or board members. They might provide valuable insights or experiences that could be crucial to the review process, drawing from a broader pool of expertise.

Bring in an expert

If you're not a contract analysis professional, consider bringing one in. Understanding the importance of a clear contract might compel you to consult with a lawyer, insurance advisor, or accountant before signing any documents. This added step could prevent major issues down the line.

Talk to former customers

To truly evaluate a company, speak with their previous clients. Allocate time in your approval process to connect with both past and current customers of the vendor under consideration. They’ll provide honest feedback about the company’s adherence to contract terms, whether strictly as written or more liberally interpreted.

Know the endgame

As a board or committee member, you likely manage several contracts at once, making it hard to track their expiration and renewal dates. Develop a master calendar for all vendor contracts to know when renegotiations should begin. Reviewing bids before a contract’s expiration gives you increased leverage in negotiations, potentially reducing costs for your association.

Contracts encompass more than just text; they dictate your interaction with vendors and the quality of service your community receives.