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Methods of resolving contract breaches in Washington

On Behalf of | Apr 6, 2022 | Business Law |

When there’s a contract breach, you don’t necessarily need to go to court to resolve it. You have other methods to potentially resolve the dispute, such as mediation and arbitration. In Washington, oral contracts have a statute of limitations of three years, and written contracts have a statute of limitations of six years. You should, however, take action as quickly as possible to correct a breach of contract.

Mediation

Mediation is less expensive than litigation. For contract disputes that aren’t severe, you may find mediation a good option. If the other person shows an unwillingness to cooperate, then an attempt at mediation is likely to fail.

Any contract that you draft and sign after mediation is legally binding. You can bring an attorney with you to the mediation if you want to. There is no obligation to sign a contract or come to an agreement after mediation, although the goal is to resolve the dispute.

During mediation, a third party facilitates discussion of the dispute and helps guide it to a resolution. They can assist in keeping tempers calm and rephrasing what someone says in a way that the other can understand it better.

Arbitration

Arbitration is similar to litigation, but it’s less formal. The drawback of arbitration is the arbitrator issues an agreement that is legally binding. All involved parties must agree to this method of resolving contract disputes to go through it. The exception is if there’s a clause in your contract that states you will use arbitration to resolve disputes or particular types of conflicts. It’s common for contracts to include arbitration clauses, which is one of the reasons why it’s important to thoroughly read and understand any contract you sign.

Litigation

If you have a lot of complex disputes or a particularly difficult person you’re dealing with, then litigation is probably your best option. Litigation is available to anyone going through a breach of contract, although how much money you can recover varies depending on the situation. For immaterial breaches of contract, damages awarded are typically lower.

You should consider the cost of litigation and how much you are losing through the breach of contract when choosing a method of resolving the problem. In some situations, mediation is a good way of resolving the conflict. In other situations, a person needs to go through arbitration or litigation.