How to Settle Contract Disputes Out of Court

How to Settle Contract Disputes Out of CourtContract disputes are very common in almost all business sectors. Most contract disputes are settled out of court, as litigation is time-consuming and costly. Whether you are facing an issue with a commercial lease, non-disclosure agreement, or another type of contract, it is important to know the options available to help you get it resolved. Contract attorneys can assess your situation, determine possible ways to settle the dispute, and provide legal representation that protects your interests.

Informal Negotiations

The first step most business lawyers take when dealing with a contract dispute is to contact the party and try to work out a resolution. Sending a letter or having discussions can often be enough to settle a dispute. If you do negotiate a settlement both parties agree to, it is critical to have an attorney prepare a formal agreement that outlines the terms. That way, if one party does not hold up their end of the bargain, the other may pursue a legal remedy.


Mediation is a popular alternative dispute resolution (ADR) method that helps parties in conflict resolve issues. In mediation, a third party facilitates and guides the process to help you reach a mutually agreeable outcome. However, a mediator does not make a decision about the dispute. Their job is to help you address specific matters and facilitate civil communication.

Mediation is often a good choice for resolving disputes, as it is much faster and less expensive than suing someone in court. Because the results are determined by the parties involved, not a judge, it can also help them feel like they have more control over the situation. If you decide to pursue mediation to settle a contract dispute, it is vital to have an experienced lawyer assist you throughout the process. For example, if you are dealing with a dispute involving the sale of a property, you should have a real estate attorney by your side in mediation.


Arbitration is a method of ADR that enables you to bring a contract dispute in front of a private arbitrator to decide your case. One advantage of both mediation and arbitration is that they are private, which allows parties to keep details confidential.

The arbitration may involve one arbitrator or a panel of three. Although the process is less formal than court proceedings, parties may present evidence and question witnesses. After all, evidence is presented and witness testimony is heard, the arbitrator makes a decision, much as a judge would.

In binding arbitration, the arbitrator’s decision is final. You must abide by the result just like you would if you stood before a judge. However, unlike court decisions, rulings in binding arbitration typically cannot be appealed.

In non-binding arbitration, the arbitrator’s determination is advisory. However, it is an effective, practical way to resolve many types of disputes. Even if a decision is rejected by one party, it can give you insight into how a case may play out in court.

Do you have a business matter or contract dispute that needs to be settled? Our business lawyers in West Chester are skilled negotiators who work to achieve the best possible outcomes for our clients.