Dispute Planning
As in medicine, prevention of disputes is generally far more cost effective than efforts to resolve issues after they arise. Even when disputes cannot be prevented, effective management can prevent small disputes from growing into large ones. We are available to consult with you about projects or programs that may lead to foreseeable disputes.
The key to dispute management is simply to recognize, plan for, and respond to common areas of conflict in commercial agreements. Although the nature of predictable disputes will vary across industries, many industries exhibit a pattern of predictable conflicts that can be managed and contained.
For example, in both information technology (“IT”) and construction , disputes over the scope of work that the vendor or contractor must complete without additional compensation are common-place, as are disputes over cost increases arising from project delays. Most IT and construction agreements require the customer to submit written requests to modify the project. The vendor must then, within a specified period, identify any likely cost and timing effects of the request. But many such contracts fail to establish a protocol for addressing disagreements as to whether a customer’s instructions are an increase in the scope of the project (as the vendor may contend) or simply instructions related to implementation of the project’s scope. IT and construction contracts also frequently fail to set rules for the parties in the event of delays (and the parties’ inevitable conflicting arguments as to which party was responsible).
Contract provisions that attempt to specify procedures for changing project scope or addressing other likely areas of conflict are more important for establishing expectations and for dispute management than for their legal significance. Obviously, even in the absence of a contract term describing procedures for “change,” the parties could modify contract terms by amendment. The value of a protocol should not, however, be understated. One of the principal reasons IT projects fail is the inability of project personnel to document, and agree upon, changes in project responsibilities or scope. Absent consistent and complete documentation—including terms and conditions of project modification—it can be difficult, or impossible, to evaluate the project’s success or failure (at least for the purpose of assigning responsibility).
