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Top Mistakes Businesses Make When Drafting Contracts That Lead to Disputes

Drafting contracts is meant to offer a sense of certainty in business agreements. When the language is unclear or inconsistent, however, the contract itself may become a source of dispute. Carefully drafting contracts can reduce risks before they become legal nightmares. Schwab & Gasparini represents businesses in contract disputes and other commercial litigation matters throughout New York. To discuss a business dispute, call the Syracuse office at (315) 422-1333, the Albany office at (518) 591-4664, or the White Plains and Hudson Valley office at (914) 304-4353.

Summary of Mistakes While Drafting Contracts

Unclear, incomplete, or inconsistent contract terms can turn a business agreement into a costly commercial dispute.

• Precise language should identify each party’s responsibilities, performance standards, deadlines, payment terms, and procedures for approving changes.
• Businesses should confirm that the written contract includes material promises made during negotiations and accurately reflects the final agreement.
• Termination rights, opportunities to cure a breach, governing law, venue, and dispute resolution procedures require careful attention before signing.

Schwab & Gasparini represents businesses in contract disputes and commercial litigation throughout Syracuse, Albany, White Plains, the Hudson Valley, and other areas of New York.

Using Vague or Ambiguous Language

A common contract issue is language that may reasonably be read to have more than one meaning. A phrase that may have obvious meaning during negotiations can become much less clear months or years down the road. That is especially true if a relationship between the parties has declined. 

Specific language can offer more certainty. Depending on the agreement, a business might need to identify deadlines, performance requirements, payment dates, quality standards, and more. The contract should reflect these expectations clearly. 

Relying on Verbal Promises That Never Make It Into the Contract

As businesses negotiate, associates will participate in phone calls, meetings, emails, and informal chats. During those conversations, one party or agent might make promises that will be hard to deliver on later in an attempt to influence the other party’s decision to sign. Problems may arise later if those promises do not appear in a final, written agreement. 

It is important to review the final contract carefully, asking one basic question: Does this document contain everything that mattered when the deal was negotiated? If promises are missing, it is best to address the issue before signing, rather than assuming everyone will remember the conversation the same way later. 

Failing to Clearly Define Each Party's Responsibilities

A contract should make it readily possible to determine who is responsible for doing what. That sounds simple, but agreements will often describe an overall transition rather than assigning obligations that make that transition possible. 

Assume that a business is hiring another company to complete a project. The contract might just describe the finished result, not the important questions about materials, permitting, change approvals, and more. 

These details are important when things go wrong. 

A strong agreement might address:

• The specific work or services that each party must perform
• Deadlines and important milestones
• Who is responsible for approvals, materials, or information
• Procedures for requesting or approving changes
• What happens when one party causes a delay

The appropriate level of detail depends on what, exactly, the transaction entails. The goal is to remove uncertainty from issues that could realistically cause conflict.

Treating Payment Terms as an Afterthought

Naturally, money is central to many commercial disputes. However, payment provisions are sometimes surprisingly lacking. When drafting contracts, a business might state a total price without any explanation of invoices or due dates. Other agreements might not address issues like deposits, additional work, disputes, or expenses. 

It is advisable to consider more than just the dollar amount. Payment provisions might need to explain when the right to payment arises and what must happen before an invoice becomes due. For longer projects, the contract might need to address whether payment is tied to specific milestones. If there is additional work, the parties should discuss and put in writing how that work will be authorized and priced. 

Clear payment terms give both sides a common reference point. There is no need to reconstruct the understanding after money is already being disputed. 

Copying an Old Contract Without Reviewing It

Templates do save time, but they can also carry old problems into new relationships. A contract that was drafted for one transaction might contain provisions that do not make sense for another. Names, dates, pricing structures, defined terms, and deadlines should be very carefully proofread before a contract is signed. 

Sometimes the problem is more serious. A business may continue using an agreement that no longer reflects its operations or its current relationships, or one that does not account for the risks that are now involved in its transactions.

Schwab & Gasparini assists New York businesses when disagreements over contractual rights and obligations arise. In commercial litigation, seemingly minor wording choices can become central issues once the parties disagree about what their contract requires.

Ignoring What Happens When Something Goes Wrong

It is natural for businesses to enter contracts with the anticipation that the relationship will work. With that having been said, the agreement still must address what happens if things do not go as planned. 

Termination provisions are of importance when drafting contracts. A document should clearly state whether either party can end the agreement. If so, it must state under what circumstances. Advance notice should be clearly defined in the contract, too. 

In addition, the agreement might need to address opportunities to correct a breach of its terms. For instance, a party may be given a certain number of days to correct a problem after written notice is given. 

Without clear procedures, even ending a failed business relationship can create another dispute. A party may believe it had the right to terminate immediately while the other party may argue that notice or an opportunity to cure was required.

Forgetting About Dispute Resolution Provisions

The substance of an agreement is important, but businesses should also consider how a future dispute will be handled, should one arise.

Contracts may contain provisions addressing governing law, venue, arbitration, mediation, attorneys' fees, and other issues that are related to enforcement. These clauses can impact what happens after a dispute begins. It is important that this language not be treated as boilerplate simply because it appears at the end of a document. 

For companies operating across state lines, governing law and venue can be especially important. A New York business might discover that a contract requires a dispute to be resolved under the laws of another state, or to be litigated thousands of miles away. Details like these deserve attention before the agreement is ever signed. 

Using Inconsistent Terms Throughout the Agreement

Lengthy contracts often evolve through several iterations of drafts. Sections might be copied or moved, revised, or added to by different people. That process creates room for human errors that are easy to overlook. 

For instance, one section might provide a 30-day notice period while another requires 60 days. A defined term might be used differently later in the agreement. An exhibit could impose requirements that conflict with the main contract.

A final review should therefore consider the contract as a whole rather than examining each provision in isolation. Defined terms, dates, deadlines, exhibits, and cross-references should match throughout the document.

Signing Before the Final Review Is Complete

A deadline can create pressure to get an agreement signed quickly. That pressure sometimes causes businesses to skip the final review or assume that changes made during negotiations were incorporated correctly.

Before signing, businesses should confirm that the final document includes all negotiated changes, identifies the correct parties, contains the proper attachments, and reflects the deal everyone intends to make. The people signing should also have appropriate authority to bind the business.

Schwab & Gasparini Represents New York Businesses

Contract disputes are rarely convenient, and they can consume time and resources that could otherwise be spent running a company. Careful drafting cannot eliminate every disagreement, but it can remove many of the uncertainties that allow disputes to grow.

When a disagreement has already developed, understanding the contract and the parties' legal rights can help a business determine what to do next. Schwab & Gasparini represents businesses in commercial and contract disputes throughout New York. To discuss a matter, call (315) 422-1333 in Syracuse, (518) 591-4664 in Albany, or (914) 304-4353 in White Plains and the Hudson Valley.

Helpful Frequently Asked Questions About Contract Disputes

The following frequently asked questions address contract drafting mistakes and the commercial disputes they may cause.

How Can Ambiguous Contract Language Cause a Dispute?

Ambiguous language may allow the parties to assign different meanings to the same provision. Clear definitions, measurable standards, and specific deadlines can reduce uncertainty about what the agreement requires.

Should Verbal Promises Be Included in a Written Contract?

Material promises made during negotiations should generally appear in the final written agreement. If an important promise is omitted, the parties may later disagree about whether it formed part of the deal.

What Responsibilities Should a Business Contract Define?

A contract should identify the work each party must perform, applicable deadlines, and responsibility for materials, approvals, or information. It may also explain how the parties will request changes and address delays.

What Should Contract Payment Terms Address?

Payment provisions may identify the total price, invoicing requirements, due dates, deposits, expenses, and pricing for additional work. For longer projects, the agreement might connect payments to specified milestones or completed tasks.

Is It Safe to Reuse an Old Contract Template?

A prior contract may provide a starting point, but it might contain terms that do not fit the new transaction. Businesses should carefully review party names, dates, pricing terms, deadlines, definitions, and risk-related provisions before reusing an agreement.

What Should a Contract Say About Termination?

Termination provisions should explain when either party may end the agreement and how much notice is required. The contract may also provide an opportunity to correct a breach within a stated period after receiving written notice.

Why Are Governing Law and Venue Provisions Important?

Governing law determines which state’s laws apply to the agreement, while venue identifies where a dispute may be heard. These provisions can significantly affect a business if the selected law or location has little connection to its operations.

How Can Inconsistent Contract Terms Create Problems?

Conflicting deadlines, definitions, exhibits, or notice requirements can make the parties’ obligations difficult to determine. A final review of the entire agreement can reveal inconsistencies that may not be obvious when provisions are examined separately.

How Can Schwab & Gasparini Help With a Contract Dispute?

Attorneys at Schwab & Gasparini could help New York businesses interpret disputed provisions, assess contractual rights and obligations, and evaluate available legal options. Consider visiting with an experienced attorney at Schwab & Gasparini to learn more about possible paths for addressing a commercial dispute.

-Andrew J. Schwab

Sat Oct 31 2026, 5:05pm