Contractual Performance
Mistakes of fact can be something simply like the misspelling of a name or something much more complex like an error in the computation of a scientific formula. Regardless of the size of the mistake, it can be grounds for a contract dispute. In these disputes, the courts usually look unfavorably at the party that wrote the contract. Over the year, several cases involving contract law have set precedence regarding how cases will be handled. In the Michigan case of Sherwood v.
Walker, the Michigan Supreme Court rules that understandings between the parties which were part of the negotiation process but not part of the final contract may be considered if they bear sufficient weight to affect the contract dispute. It is obvious from the review of law regarding contract disputes and contract law, that it is imperative that lawyers get the facts right and understand all the applicable parts of the law when writing a contract. Mistakes in the drafting of the contract can lead to major disputes.
Common mistakes made in contracts include not specifying the terms of the contract, not specifying who has jurisdiction over any disputes and not planning for dispute resolution. It is therefore very important that anyone involved in writing contracts double check their facts and ask questions until they are completely clear on the issues at hand. The more clearly a contract explains the conditions under which it operates, the less likely it is to end in a contract dispute.
Mistakes of law are mistakes which are made because someone incorrectly interpreted the law. These are the biggest mistakes that can be made in contract law, because they almost always result in a finding against the person who wrote the contract, or who hired the lawyer who wrote the contract. A mistake of law can as simple as specifying in the contract what court will have jurisdiction over the matter and incorrectly choosing a state court over a federal court or vice versa.
Or, a mistake f law can be on a grandiose scale, such as incorrectly interpreting the impact that an environmental statute will have on a proposal to build a new landfill. A mistake of law in a contract can be no big deal if the contract is never disputed. Problems arising from mistakes made in the contract only become an issue when the contract is disputed.
If both parties execute the contract in the manner anticipated and the contract is never disputed, the question of mistakes becomes moot. However, since no entities, no matter how closely tied, can rely on contracts being handled without dispute, it is imperative that the party drawing up the contract be certain that they have a complete understanding of how the law applies in the situation and that the knowledge is reflect in the wording of the contract.
One common mistake of law in contracts is the inclusion of a penalty for contract termination While including specific language regarding contract termination is a very good idea, penalties must clearly reflect actual damages caused by the breach of contract; punitive damages clauses are not permissible in contract law (Davis 2007).
When dealing with very large contracts, this issue can be very complex. A company may claim losses due to efforts put into a failed contract and may try to recoup some of those losses through pre-arrangement with a damages clause in the contract, but it cannot seek to punish its failed contractual partner with the damages clause.
Walker, the Michigan Supreme Court rules that understandings between the parties which were part of the negotiation process but not part of the final contract may be considered if they bear sufficient weight to affect the contract dispute. It is obvious from the review of law regarding contract disputes and contract law, that it is imperative that lawyers get the facts right and understand all the applicable parts of the law when writing a contract. Mistakes in the drafting of the contract can lead to major disputes.
Common mistakes made in contracts include not specifying the terms of the contract, not specifying who has jurisdiction over any disputes and not planning for dispute resolution. It is therefore very important that anyone involved in writing contracts double check their facts and ask questions until they are completely clear on the issues at hand. The more clearly a contract explains the conditions under which it operates, the less likely it is to end in a contract dispute.
Mistakes of law are mistakes which are made because someone incorrectly interpreted the law. These are the biggest mistakes that can be made in contract law, because they almost always result in a finding against the person who wrote the contract, or who hired the lawyer who wrote the contract. A mistake of law can as simple as specifying in the contract what court will have jurisdiction over the matter and incorrectly choosing a state court over a federal court or vice versa.
Or, a mistake f law can be on a grandiose scale, such as incorrectly interpreting the impact that an environmental statute will have on a proposal to build a new landfill. A mistake of law in a contract can be no big deal if the contract is never disputed. Problems arising from mistakes made in the contract only become an issue when the contract is disputed.
If both parties execute the contract in the manner anticipated and the contract is never disputed, the question of mistakes becomes moot. However, since no entities, no matter how closely tied, can rely on contracts being handled without dispute, it is imperative that the party drawing up the contract be certain that they have a complete understanding of how the law applies in the situation and that the knowledge is reflect in the wording of the contract.
One common mistake of law in contracts is the inclusion of a penalty for contract termination While including specific language regarding contract termination is a very good idea, penalties must clearly reflect actual damages caused by the breach of contract; punitive damages clauses are not permissible in contract law (Davis 2007).
When dealing with very large contracts, this issue can be very complex. A company may claim losses due to efforts put into a failed contract and may try to recoup some of those losses through pre-arrangement with a damages clause in the contract, but it cannot seek to punish its failed contractual partner with the damages clause.
Source: law aspect
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