When you have a business such as a dental practice that involves contracts of any type, there is always the chance that a contractual dispute might one day arise. No one wants to deal with a dispute, but knowing how to handle them in advance will provide you with the confidence you need to prevail. By taking the time to understand common disputes and the reasons behind them, you will be fully equipped to resolve any potential problems that might come your way.
Disputes can cause a number of complications for your dental practice. They can directly affect your normal business flow, as well as cause financial and emotional distress to all parties involved in your practice. Many times, these disputes result from a contract that is unclear or completely fails to address the issue in question.
One of the best ways to avoid these contractual shortcomings is to be completely prepared from the beginning. By consulting with a dental attorney who has significant experience in drafting contracts related to your dental practice, you can rest assured that your contracts are less likely to be challenged.
Even when you have sufficiently prepared your practice’s contracts by way of a competent dental attorney, though, you may still run into a contractual dispute. Sometimes, disputes with other dentists will arise. These often are the result of violations of restrictive covenants, also known as non-compete clauses, sales disputes, or partnership agreements.
Non-Compete Clauses and Sales Disputes
Non-compete clauses are included in contracts for the specific purpose of limiting employees from practicing the same type of business as you at the end of their term of employment with you. Such a clause generally requires limitations on the amount of time the restriction extends to, as well as a description of the geographic area that the employee is prevented from practicing in. One common issue that arises with this type of clause is an unclear definition of the time frame or geographic area restriction.
By ensuring that your contract is legally sound and airtight as your employee exits, you can avoid having to work out the kinks later. However, should a dispute arise, your dental attorney can walk you through the settlement, arbitration, or court process should you be owed damages or owe damages.
Sales disputes may also arise after there has been a transfer of your dental practice. There are a number of reasons why there may be a sales dispute, such as buyer or seller remorse or miscommunication regarding some part of the transaction itself. Again, one of the best ways to avoid these problems is to be completely clear from the initial stages of the transfer.
Take the time to discuss what the buyer or seller is seeking to do after the transaction is complete. Does that person sound truly ready to “let go”? If not, trouble could arise in the future. By working with a seasoned dental attorney throughout the transfer process, you can avoid complications later. Should you happen to stumble into a dispute, however, your dental attorney can guide you through the resolution process to define who might be owed what damages.
Partnership Agreements
Aside from dentists outside of your practice, employees, or associates, you can also get into disputes with your practice partners. Some common problems are related to spending authority, dissolution arrangements, income splits, assets, and handling issues.
By failing to include clauses related to these issues in your employment or partnership contracts, you can leave yourself open for liability. Be certain to consult a dental attorney to mitigate these issues through carefully crafted language. This will hopefully help you to avoid contractual disputes altogether.
In addition to contractual disputes with other dentists outside of your practice, you may have disputes with your own employees or independent contractors (ICs). These issues can arise because of the solicitation of employees or patients or other problems that require dispute resolution.
When a dental practice hires an IC or associate, it would be ideal for that practice to retain that employee forever. However, that is not always practical. In fact, some associates may aspire to open their own practice. When that time comes, the associate may seek to entice other employees or patients to join them in their pursuits.
One way to avoid this conflict is to include an additional clause along with a non-compete clause: a non-solicitation of employees clause. While it might seem sufficient to include a generic non-solicitation clause, a dental attorney can help you craft a clause to suit your practice’s specific needs.
By being too broad or too narrow in scope, you could leave yourself open to a possible dispute resulting in damages. Therefore, it is crucial that you consult with your dental attorney in relation to any contract with an associate or other employee.
There are also ways that you can avoid litigation with associates or employees by including alternative dispute resolution clauses in your employment contracts. By including these types of clauses, you can limit the ways in which you resolve your disputes. There are generally two alternative types of dispute resolution: mediation and arbitration.
Mediation involves a third party who helps the concerned parties reach a compromise to resolve the issue. Arbitration, alternatively, results in a decision by an arbiter or a panel of arbiters after the parties have stated their arguments. In some instances, contracts can even require both of those options if one fails to work. Either way, both mediation and arbitration are significantly cheaper than traditional litigation.
Contractual Disputes with Your Landlord
One last party that your practice could have contractual disputes with is your landlord. If you do not own your property or land outright, it is likely that you have a contract with your landlord. In the case of leasing, you will want to have each and every aspect of the lease written into your contract. This includes property improvements, defects and repairs, rent levels and increases, and eviction. By leaving these clauses out or being too vague, you are simply asking for a dispute to arise. To protect yourself and your assets, hiring a dental attorney to assist with the lease process will help you avoid any potential contractual disputes.
Conclusion
While contractual disputes are often cumbersome and stressful for all parties involved, sufficiently preparing ahead of time is the best way to avoid them. By drafting contracts with the assistance of a dental attorney, you can work to get your clauses right the first time. Should you find yourself in the middle of a contractual dispute, however, you can trust your dental attorney to help you resolve the issues and work to mitigate the possibility of any future damages.
Mr. Oromchian, JD, LLM, is one of the nation’s leading dental lawyers on topics relevant to dentists. He is the founder of Dental and Medical Counsel PC, which is regarded as one of the preeminent dental law firms devoted to dental entrepreneurs. He is also recognized as an exceptional speaker and educator. Additionally, he is the author of The Strategic Dentist, which serves as a guide to dentists looking to purchase or start their own practice. He can be reached at ao@dmcounsel.com.
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