Accuracy, clarity, and specificity are crucial when it comes to drafting (or signing) a contract. Failure to prioritize these elements can lead to confusion and, in many cases, costly litigation.
Recently, issues stemming from contract language and inaccuracies spurred a dispute between the operators of a stadium and a security company they hired to work events for 14 months.
According to reports, the company hired to run the stadium accused the security company of overbilling and fraud. Among other violations, the security company allegedly submitted invoices listing workers who had been terminated, workers who worked more than 24 hours in a day and workers who appeared twice on the same list.
Problematic contract terms
In that case, the security company defended the claims based on a contract provision that the contract gave the stadium the opportunity to audit their performance, but the stadium chose not to do so and thereby waived claims of over-billing. Skillfully drafting a contract that includes specific language for auditing performance and billing can be valuable protection for your business.
In that case, the security company also expressed dissatisfaction that the stadium publicized its allegations of over-billing rather than bring the complaints privately to them. Again, including appropriate dispute resolution methods in that contract would have avoided the public embarrassment and, even though the security company prevailed, they lost business due to the bad publicity.
What California business owners can take away from this case
Situations like this one are not uncommon, but they can be prevented. Businesses should always retain an experienced attorney to examine or draft an agreement that is clear, accurate and specific, with your company's best interest in mind.