In order to understand the difference between government contract dispute and private business contract dispute, you must first understand how government contracts work. According to Dirk Jordan of The Jordan Law Firm, the government is often a monopoly. Jordan gives the example of road building. If a contractor builds roads and he contracts with the government, and something goes wrong, the contractor will find himself out of business. And, when you contract to create or build products or services used or owned by the government, you only have one client. This can be a risky business for contractors, so it is important to make sure you understand your contracts completely in order to protect yourself and your business.
Government Contracts
When resolving a government contract issue, it is important to work with a legal professional who understands not only contract law, but how contract law works when dealing with the government. It is possible to work out a settlement or agreement with the government, but it can be difficult. Your better defense is to make sure everything is in order before work begins. When in doubt, address your concerns in writing. This way both parties will know what to expect and contractors will not be surprised when the government claims there was a breach of contract. If the contract is clear and detailed, all of the issues will be handled before they become a problem. In the case of building a road, the location, the width, length, and other specific details need to be included in the contract. This may seem obvious, but if the specifics are left out, there can be miscommunication and dispute at the end of the project.
Private Business
Private business contract disputes can be just as frustrating as government disputes, but they are often less damaging for the sole reason that both parties can go elsewhere to get or give services or products. If you are selling food to a restaurant, building commercial office space, creating marketing materials for a company, or any other thousands of scenarios, either party can go elsewhere if they are unhappy. Restaurant owners can insist fresh fish be delivered to their business every morning by a certain time under a contract. And if the fish is not delivered according to the contract, the owner has options for recourse. While assuring they are compensated for the breach of contract, they can choose from numerous other fish supply companies.
Providing Services
The same is true for a service provider. Say you own an advertising firm, and advertising is the service you provide, and you supply a client with logo designs and print materials for an ad. If you meet the agreed upon contract standards, you have a right to demand your money. While you are fighting for your payment, you are free to offer your skills to other potential customers.
While you will have to deal with the nuisance and hardship of fighting for a resolution, you will probably not go out of business because of one dispute when working with private companies. As long as you maintain your reputation, occasional problems are not going to ruin your business.
Objectivity vs. Subjectivity
On the other hand, if you are a government contractor, your reputation only needs to be maintained for one client. But, if you contract with private business, you rely on word of mouth. The more quality references you can supply to potential customers, the better. You need to constantly be focused on your reputation and you need to build relationships with happy clients so they are willing to share their opinions with others. When working with the government, you need only impress them with your work. You will still need to create bids, but the government often focuses on cost and quality more objectively. If you are able to meet deadlines, how much clients “like” you may be irrelevant.
A government contract relationship is often less symbiotic than a private business relationship. The government is working within certain parameters and, to return to the previous example, your road building will be guided by specific, nonnegotiable standards. When dealing with private contracts, issues may be more subjective. For instance, what you consider fresh fish may not be considered fresh by your client. In order to protect yourself, you should make an effort when drawing up the contract to make it as objective and detailed as possible.
Contract law can be complicated, especially when you depend on it for your livelihood. If you have concerns about entering into a business contract, government or private, speak with a law professional like those at The Jordan Law Firm.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
