Inconsistent agreements: Overview, definition, and example
What are inconsistent agreements?
Inconsistent agreements happen when two or more contracts between the same parties contain conflicting terms. This can create confusion about which terms apply, leading to legal disputes or uncertainty in business relationships.
For example, if a supplier signs one contract agreeing to deliver products within 10 days but another contract with the same buyer states delivery must happen within 5 days, the agreements are inconsistent.
Why are inconsistent agreements important?
Inconsistent agreements can cause misunderstandings, delays, and legal risks. If different contracts contradict each other, businesses may struggle to determine their actual rights and obligations. This can lead to disputes, financial losses, or even contract breaches.
To avoid problems, businesses should ensure their contracts align, use an order of precedence clause to clarify which agreement takes priority, or review past agreements before signing new ones.
Understanding inconsistent agreements through an example
Imagine a freelance graphic designer signs a service agreement with a client stating they will be paid 50% upfront and 50% upon completion. Later, the same client sends a separate contract stating payment will be made only after all revisions are finished. Since these two agreements contradict each other, the designer may not know when they will actually get paid.
In another example, a software company signs a contract with a distributor stating that their software must not be resold. However, a second contract between them includes a resale agreement. If both contracts are legally binding, it may be unclear whether reselling is allowed, creating potential legal conflicts.
An example of a clause to prevent inconsistent agreements
Here’s how a contract might address inconsistent agreements:
“In the event of any inconsistency between this Agreement and any other agreement between the Parties, the terms of this Agreement shall prevail.”
Conclusion
Inconsistent agreements can create confusion, delays, and legal risks when contracts contain conflicting terms. Businesses should carefully review their contracts, ensure consistency, and use clear language to avoid misunderstandings.
Including a clause that resolves inconsistencies can help prevent disputes and make sure everyone knows which terms apply.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.