Manhattan businesses can face a wide range of contractual disputes during their options. Here’s a rundown of the five most common disputes that New York businesses faced in 2024.
Breaches of Contract
Breaches of contract rank among the top contract disputes that Manhattan businesses face. A breach of contract occurs when a party to a contract fails to fulfill their contractual obligations. A contractual breach may qualify as minor or major. A minor breach does not frustrate the contract’s essential purpose; a non-breaching party does not have the right to cease performing under the contract when a minor breach occurs. A material breach frustrates a contract’s essential purpose(s) and entitles the non-breaching party to stop performing and pursue an action for compensation.
Common examples of breaches of contract include non-payment, failure to deliver conforming goods/services, or violations of restrictive covenants like non-disclosure or non-solicitation provisions.
Ambiguous Contract Terms
Another common issue that can lead to contract disputes includes ambiguous contract terms. Poorly worded contract provisions or contracts that fail to address situations that arise in a contractual relationship can lead to disputes when both sides have differing interpretations or expectations under the contract. Contract terms that frequently suffer from ambiguous terms include payment terms, scope of work, and limitations of liability.
When parties cannot resolve disputes over ambiguous contract terms, they may turn to the courts for judgments that resolve ambiguities based on extrinsic evidence outside the contract, the parties’ past practice, industry standards, and basic legal principles.
Supply Chain Disruptions
Contract disputes can occur when supply chain disruptions lead to parties becoming unable to perform their contractual obligations. Supply chain disruptions can occur for numerous reasons, including natural disasters, resource shortages, sanctions, and tariffs. When supply chain disruptions affect a party’s ability to perform under a contract, that situation can trigger the contract’s force majeure clause. As a result, parties may have a significant legal dispute over whether a party’s non-performance constitutes a material breach or whether the contract’s force majeure clause excuses the non-performance and relieves that party from liability for the other party’s losses.
Contact Modifications
Parties can also get into disputes over proposed contract modifications. Modifications may become necessary due to price changes, delayed delivery times, or unexpected additional work. However, contract modifications can cause disputes when parties make an oral modification versus a written modification. An oral modification means the parties have failed to document the changes to their contract; legal disputes can occur when each party has a differing memory of what modifications they agreed to. As a result, parties should always use change orders or similar written amendments to document contract modifications. Parties should also document negotiations of contract modifications to ensure any modifications accurately reflect the parties’ agreement.
IP and NDA Disputes
Businesses in Manhattan frequently have intellectual property and confidentiality disputes. IP disputes may involve infringement allegations, licensing agreements, or disputes over assigning inventions/works. Companies frequently protect their IP through non-disclosure agreements with parties to whom they disclose their IP. However, when those parties misappropriate IP or disclose it to third parties, companies may initiate litigation to protect their interests and seek financial relief for their losses. Businesses can protect their IP rights through carefully drafted non-disclosure/non-use agreements and implementing comprehensive information security measures. Companies should also carefully monitor the market for signs that other parties may have misappropriated or attempted to copy their intellectual property.
Contact a Manhattan Contract Litigation Attorney Today
If you have a contract dispute in Manhattan, let a litigation attorney from Levy Goldenberg LLP help protect your rights and interests. We have extensive experience representing businesses and parties in commercial contract disputes, and we’re ready to apply it to your case today. Contact our firm today for a confidential consultation to discuss your legal options.