Introduction
Contract disputes rarely happen overnight. In most cases, disagreements begin as small misunderstandings, subtle behavioural changes, or seemingly harmless delays that slowly accumulate until they become major conflicts. By the time parties acknowledge that “there is a problem,” the dispute may already have escalated into financial loss, damaged business relationships, or even litigation.
For businesses, early detection of disputes is of utmost importance. Catching early warning signs allows companies to intervene before issues harden into positions. It also enables businesses to take steps that protect their interests, avoid unnecessary costs, and maintain strong commercial relationships. In an environment where time, credibility, and money are always at stake, being proactive can make the difference between a quick resolution and a protracted, expensive conflict.
From experience, disputes leave clues long before they formally emerge. The difficulty is not in identifying obvious conflicts, it is in noticing the subtle behaviours and recurring patterns that signal an underlying issue. This article highlights the red flags businesses often overlook and offers practical steps on what to do once these early warnings appear.
Key Red Flags Businesses Often Miss
1. Communication Gaps
One of the most common and most ignored signs of an emerging dispute is a change in communication patterns. Businesses are accustomed to occasional delays, but when these delays become a pattern, they may indicate that a deeper issue is brewing.
Look out for:
• Delayed responses without reasonable explanation
• Emails that provide incomplete answers
• Evasive replies that avoid addressing the real issue
• Shifting explanations for the same concern
• A sudden change in communication tone
Consistent communication issues often signal internal disagreements, operational breakdowns, or unwillingness to confront a developing problem. When a party begins to “go silent,” it may be preparing for dispute escalation, gathering evidence, or avoiding accountability.
2. Late or Partial Payments
Money rarely lies. When a business partner begins to default on its financial obligations, it often reflects an underlying challenge, whether financial distress, dissatisfaction with performance, or internal disputes. Warning signs include:
• Late payments becoming the norm rather than the exception
• Partial payments with vague justifications
• Repeated references to cashflow constraints
• Requests for extended credit terms outside the contract
• Attempts to renegotiate payments informally
Businesses sometimes treat these issues gently to preserve relationships, but persistent payment irregularities are among the strongest predictors of future disputes. Even where the excuses sound reasonable, a pattern of delay often suggests that the party may be preparing to contest invoices, question performance, or renegotiate unfavourable terms.
3. Scope Creep or Repeated Variations
Scope creep is a silent dispute former. It occurs when one party consistently pushes for additional work, changes, or deliverables beyond what was originally agreed, usually without adjusting timelines or fees.
Examples include:
• “Can you just add this one more feature?”
• Requests for additional services without documentation
• Expanding work expectations based on hearsay or verbal discussions
• Informal approvals given by unauthorised personnel
Unmanaged scope creep leads to misunderstandings about entitlement to payment, dissatisfaction with performance timelines, and accusations of incomplete or substandard delivery. Many disputes could be avoided if parties formalised every change through proper variation orders for instance by documenting each variation in writing.
4. Contradicting Instructions from Key Personnel
When different representatives of the same organisation give conflicting directives, it may seem like a mere internal miscommunication, but it often signals something deeper. This is a red flag for:
• Internal power struggles
• Lack of clarity about the contract’s objectives
• A brewing dispute between the department overseeing the contract and upper management
• An intention to shift blame if things go wrong
Contradicting instructions create confusion for the contractor and expose them to performance risks. When instructions are later challenged, the contractor may be blamed for following “the wrong directive,” even though both were official.
5. Reluctance to Share Information or Grant Access
A sudden lack of transparency is almost always a warning sign. When parties become hesitant to share necessary information, it may indicate non-compliance issues, performance failure, or internal disputes they are trying to conceal.
Watch out for:
• Refusal to grant access to facilities, data, or personnel
• Withholding documents needed to progress work
• Selective disclosure of information
• Requests to “hold on” before proceeding without explanation
A party that is confident in its performance rarely hides information. Restricting access is usually a sign that something is wrong or that the party anticipates a dispute and is trying to control the narrative.
What to Do When You Spot a Red Flag
Recognising early warning signs is valuable, but what you do next is even more important. The wrong response, even an innocent one, can weaken your legal position. Below are practical steps to follow when red flags appear.
1. Document Your Concerns
The first step in managing emerging disputes is proper documentation. This is your strongest shield if things escalate.
Document immediately:
• Emails and messages showing delays or contradictory information
• Notes of conversations and clarifications sought
• Timeline of events and missed deadlines
• Any informal instructions received from unauthorised persons
Well-kept records prevent disputes from becoming “your word against theirs.” They also allow counsel to build a clear narrative if the matter moves toward mediation, arbitration, or litigation.
2. Seek Clarification Early
Not every red flag indicates malicious intent. Sometimes, early clarification resolves misunderstandings before they escalate.
Ask straightforward, professional questions such as:
• “Could you please clarify the reason for this change?”
• “Should we document this variation formally?”
• “Is there a challenge we should be aware of?”
Seeking clarification shows good faith, preserves relationships, and makes it harder for the other party to shift blame later. Most importantly, it forces issues into the open early.
3. Begin Internal Evidence Preservation
Once you sense a dispute may emerge, begin preserving evidence internally, even if the issue has not yet escalated.
Practical steps include:
• Saving all versions of deliverables
• Backing up email threads, chats, and documents
• Ensuring that records remain unaltered and traceable
• Instructing key personnel to maintain proper logs
Evidence preservation strengthens your bargaining power and allows for accurate reconstruction of events.
4. Consult Counsel Before Responding
This step is critical. A single poorly worded email can jeopardise your future claim or defence. Even expressions of sympathy or informal apologies can be interpreted as admissions of guilt.
Counsel can assist with:
• Drafting responses that maintain your legal position
• Ensuring you invoke contractual rights correctly
• Advising whether to issue formal notices
• Helping you avoid inadvertent admissions
Early legal advice is far less expensive than dispute firefighting and often prevents avoidable escalation.
Conclusion
Disputes rarely emerge unexpectedly. They send early warnings: delayed communication, irregular payments, shifting scopes, internal contradictions, or a sudden lack of transparency. Businesses that learn to recognise these signals can intervene early, reduce financial exposure, and preserve valuable commercial relationships.
Ultimately, proactive dispute management is a competitive advantage. It protects your business long before conflicts reach the boardroom or the courtroom.
About the Authors
This guide was prepared by the Dispute Resolution team at Broderick Bozimo & Company. The team advises on contractual disputes, commercial litigation, and arbitration, drawing on decades of experience representing clients in high stakes matters across Nigeria.
Contact
Broderick Bozimo & Company
21 Dakala Street, Wuse 2, Abuja F.C.T.
Nigeria
Email: insights@broderickbozimo.com
Website: www.broderickbozimo.com
Disclaimer
This publication provides general information and does not constitute legal advice. You should not act or refrain from acting based on its content without seeking professional advice. Contacting us does not create a solicitor-client relationship. We can only act once we have completed a conflict check and both parties have signed a formal engagement agreement.
