A large number of business disputes, including those leading to lawsuits, arise out of the fact that the parties involved did not put their agreement in writing.
This omission can occur in one of two forms.
1. The initial agreement between the parties was not put in writing.
This is the worst scenario of all. If contractor John Smith orders a ton of crushed stone for a project, and the supplier delivers a ton of pea gravel, we have a problem. The problem can arise in two ways. First, if they two parties genuinely and honestly remember their version of the facts. The second difficulty can occur is if one of the parties is flat out lying about what was agreed to. Either way, if the parties cannot resolve their differences, they will be headed to court.
2. Although the initial agreement was put in writing, subsequent change orders were not put in writing.
This is the one of the most common sources of disputes between buyers and sellers. It is especially common in construction disputes. After a homeowner signs a contract for the construction of a home, he or she may later decide to add a second fireplace at a cost of $2500. If this change order is not put in writing, the following can occur.
A. The contractor forgets to add the second fireplace.
B. The contractor adds the second fireplace and charges the homeowner the sum of $4000.
When constructing a home or commercial building, every change order should be put in writing, with the agreed price adjustment specified. This task takes no more than 5 minutes, but can save thousands of dollars in attorney fees associated with subsequent litigation.