What's your approach to resolving contract disputes?

1 Understand the contract

The first step to resolving any contract dispute is to understand the terms and conditions of the contract you signed. A real estate contract is a legally binding document that outlines the rights and obligations of both parties, as well as the remedies and consequences for breach or default. You should review the contract carefully and consult with your real estate agent or attorney if you have any questions or concerns. You should also be aware of the deadlines and timelines for performing certain actions, such as inspections, appraisals, financing, and closing.

3 Seek mediation or arbitration

The third step to resolving a contract dispute is to seek mediation or arbitration if communication and negotiation fail. Mediation and arbitration are alternative dispute resolution methods that involve a neutral third party who helps the parties reach a voluntary agreement or makes a binding decision, respectively. Mediation and arbitration are usually faster, cheaper, and less adversarial than litigation, and they can preserve the relationship between the parties. However, they also have some drawbacks, such as limited discovery, confidentiality, and enforceability. You should check your contract to see if it requires or allows mediation or arbitration, and consult with your real estate agent or attorney before choosing this option.

4 File a lawsuit or a complaint

The fourth step to resolving a contract dispute is to file a lawsuit or a complaint if mediation or arbitration are not available or successful. A lawsuit is a legal action that involves taking the other party to court and asking a judge or a jury to decide the outcome of the dispute. A complaint is a formal grievance that involves reporting the other party to a regulatory body, such as the state real estate commission or the local board of realtors, and asking for an investigation or a sanction. Both options are usually costly, time-consuming, and stressful, and they can damage your reputation and relationship with the other party. You should only resort to this option as a last resort, and consult with your real estate agent or attorney before taking this step.

5 Learn from the experience

The fifth step to resolving a contract dispute is to learn from the experience and avoid repeating the same mistakes in the future. Contract disputes are often caused by poor communication, unrealistic expectations, lack of due diligence, or unethical behavior. You should reflect on what went wrong and what you could have done differently, and apply the lessons learned to your next transaction. You should also update your knowledge and skills on real estate contracts and forms, and seek feedback and guidance from your peers and mentors.

6 Protect yourself and your clients

The sixth and final step to resolving a contract dispute is to protect yourself and your clients from any potential liability or harm. Contract disputes can expose you and your clients to legal risks, financial losses, or emotional distress. You should make sure that you have adequate insurance coverage, such as errors and omissions insurance or general liability insurance, to protect yourself from any claims or lawsuits. You should also make sure that you follow the code of ethics and standards of practice of your profession, and act in the best interest of your clients at all times.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?