Beyond the contract

A global study of how disputes arise, escalate, and get resolved

In collaboration with

Resolutiion-Full-Logo-Light-RGB

Introduction: why read this report?

Market disruption and business uncertainty inevitably increase the risk of disagreements between customers and their suppliers. This can lead to increased collaboration – or to more frequent disputes.

This 2026 report provides global, cross-sector insight into the current state of buyer and supplier relationships. It confirms the continuing growth of executive interest in disputes and their resolution. More importantly, it indicates a shift toward collaboration, with organizations seeking a more amicable resolution rather than confrontation. This results in two interesting trends – one being a reduction in the perceived usefulness and relevance of contracts; the other being the removal of lawyers from the frontline.

However, our study reveals important variations in attitude and approach – not only between the buyer and the seller, but also across sectors, geographies, and business sizes. With input from more than 350 organizations, this report provides a fascinating insight into the state of conflicts and disputes in 2026.

In this report, we define a dispute as:

As an escalated disagreement which creates a need for intervention.

Beyond the contract

A global study of how disputes arise, escalate, and get resolved

Executive summary

Contractual disputes are rarely managed as legal contests. Instead, they are treated as operational and relational disruptions which require stabilization, clarification, and – in general – collaborative problem-solving.
 
Dialogue precedes escalation; executive engagement often precedes legal involvement; and formal dispute processes are widely described as a last resort. At first glance, this could be interpreted as a cultural shift toward relational contracting, mirroring our findings in other studies that ‘collaboration’ is a preferred model. But closer reading of detailed comments suggests there may be something deeper – the contract is not avoided simply because parties prefer cooperation. In many cases, it is avoided because it cannot, on its own, resolve the situation and, in today’s volatile market conditions, may no longer reflect operational reality.
 
Many disputes described in the data arise from evolving scope, shifting priorities, ambiguous drafting, regulatory change, or operational interdependencies that were not – and often could not have been – fully anticipated at the time of contracting.
 
This again bears out the most recent findings in our most recent Global Benchmarking report, which revealed 87% of organizations encountering heightened levels of market and operational uncertainty. In situations such as this, it is typically the case that delivery reality drifts from the assumptions embedded in the original agreement. When friction arises, the contract may be silent, ambiguous, or grounded in a context that no longer reflects present circumstances. Informal change management may have weakened the position of one or both parties with regard to their contractual rights. Strict enforcement may be technically defensible yet commercially destructive.
 
This pattern aligns closely with incomplete contract theory: Contracts cannot specify every future contingency, particularly in complex or long-term arrangements.
 
Within 'The leading cause of disputes', the contract is often silent or ambiguous, so parties revert to dialogue because the document cannot supply an answer. As uncertainty unfolds, resolution depends less on clause interpretation and more on governance capability, decision rights, and commercial judgement.
 

The leading causes of disputes

Graphic-02-2
Contracts, in their current form, have failed to adjust to the needs of the business.
 
When evaluating disputes, it is important to appreciate how views are influenced by which side of the contract people are on. Buyers typically describe disputes as governance challenges, issues to be contained so that operational delivery continues. They emphasise structured escalation routes, separation of dispute from business-as-usual performance, and mediation by procurement or commercial teams. They want to safeguard supply.

Suppliers describe a parallel but different risk-weighted reality. For them, the focus is on protecting reputation, preserving future business, managing internal alignment, and
sometimes conceding ground even when sceptical of the customer’s claim.

As Figure 1 shows, for several behaviours both sellers and buyers rely heavily on dialogue and negotiation; both are cautious about visible legal escalation because it entrenches positions and damages value. 
 
Figure 1: Approximate behaviour prevalence
Figure-01-2
 
Perspectives from different sectors are evident. Assetintensive sectors such as Aerospace, Energy, and Construction emphasise root-cause analysis, structured escalation, and executive resets, reflecting high interdependence and long contract cycles. These are also sectors where a ‘claim culture’ is more prevalent and low margins restrict options for settlement. Consulting and technology sectors demonstrate commercial creativity through a readiness to consider credits, renewals, governance resets as ways to preserve long-term account value. Public and regulated environments show clearer formal escalation ladders. Yet across sectors, the dominant response is consistently to seek collaborative containment before contractual enforcement.

The most significant insight is therefore not that parties are ‘soft’ on enforcement, but that they are operating within the structural limits of contractual specification and usefulness. Disputes escalate not because contracts are absent, but because contracts are incomplete. Resolution requires relational resilience, transparent communication, and disciplined governance. A final point worthy of note is the often-negative perception of third-party influence – advisers, consultants, law firms are often viewed as more likely to introduce an adversarial approach to any disagreement. In short, modern dispute management appears to operate in the gap between what the contract can specify and what evolving delivery realities demand. It is in that gap, not in the clauses themselves, that commercial capability determines whether conflict is stabilised or amplified.

Conclusion

Technology and the future of dispute management
The three stories in this report share a common thread, where the damage was done gradually, often due to poor visibility. Governance meetings were not held, interface responsibilities were not mapped and compliance concerns were escalated without stakeholder alignment. In each case, the information needed to prevent the dispute existed somewhere in the organization, but it was fragmented, unmonitored, or arrived too late.

Traditional contract lifecycle management tools typically govern the document, not the relationship. They offer little or no visibility into how delivery is unfolding after signature. That gap is where most value is lost, and where most disputes begin. Increasingly, there are platforms emerging which are designed specifically to operate in that gap. Rather than reporting on what has already happened, they continuously monitor delivery signals and flag where risk, ambiguity, or misalignment is emerging. The platform highlights repeating issues and friction points, patterns in delivery breakdowns, and relationship-level performance trends, shifting dispute management from a legal function triggered by crisis to a commercial function embedded in everyday delivery oversight.

Where disputes do arise, technology can impose the structured process that informal escalation typically lacks: documenting issues, identifying root causes, and tracking resolution through to completion. In regulated sectors especially, that audit trail is the difference between demonstrable governance and regulatory exposure. Technology extends visibility and structures process. The governance decisions, and the culture that supports them, remain a human responsibility.

What surprised us most
The data reveals a striking contrast in how buyers and suppliers experience the same dispute. The Figures 13 and 14 capture this, first through the lens of psychology and motivation, then through observable behaviour and its relative strength across both sides. The most striking insight is not simply that buyers and suppliers both favour collaborative dispute resolution, it is why this appears to happen, and whether the reasons are the same on both sides.

Figure 13: How buyers and sellers experience disputes differently

Figure 14: Likelyhood of behaviour / issues in disputes

Figure-13-1
Figure-14
 
Across sectors and roles, respondents consistently describe dialogue, de-escalation, and structured governance as their primary tools, with legal enforcement widely portrayed as a last resort. At first glance, this suggests a cultural shift away from adversarial contracting. That shift is occurring, but the data also suggests it may be driven less by goodwill than by the growing inadequacy of the contracts themselves, a point WorldCC has explored in depth.

Many of the disputes described arise from evolving scope, ambiguous drafting, shared responsibility, or governance gaps. In such situations (and market conditions are making them more frequent) the contract often provides limited practical guidance. It may be silent on the specific issue, built on outdated assumptions, or framed in ways that no longer reflect operational reality. Strict enforcement may allocate blame, but it rarely preserves value. Practitioners appear to recognise this implicitly. They rely on governance forums, executive judgement, and commercial negotiation not because they disregard the contract, but because the contract cannot resolve the current reality. This reflects a core insight of incomplete contract theory: agreements cannot anticipate every contingency, particularly in complex, interdependent environments.

The second, subtler finding lies in the asymmetry the pattern in Figure 14. Buyers frame disputes primarily as governance and performance management issues. Suppliers more frequently express concern about reputation, future revenue, and power imbalance, with some openly acknowledging that they concede ground, even when unconvinced by the customer’s position, simply to protect the relationship.
 
Both sides believe they are acting reasonably. Yet they experience the same dispute from fundamentally different risk positions, with different fears, different definitions of success, and different thresholds for concession.

Taken together, the findings suggest that modern dispute management is less about contractual interpretation and more about managing the inevitable gap between initial requirements and obligations and reality over time. Contracts structure the relationship. Trust, judgement and the effectiveness of on-going governance determine whether it adapts and survives stress.

Disputes rarely become destructive because of what the contract says. They escalate when the gap between contractual design and lived delivery is managed poorly, or when one side perceives the other as exploiting that gap rather than navigating it in good faith.
 
 
Where does your organization stand?
The patterns in this report are sufficiently consistent to suggest that most people reading it will recognise something of their own experience – the meetings that don’t happen, the scope boundaries that were never quite clear or were adjusted informally, or the compliance concern that moved straight to legal without a conversation first. The question is not whether risks like this exist, but whether your organization has the visibility, the processes, and the culture to manage them before they become disputes.
 
The goal of this report
We are not aiming for perfect contracts. Rather, the report highlights the governance, visibility, and organizational alignment that is needed to manage what contracts inevitably leave unresolved. Organizations that build those capabilities spend less time in disputes and more time delivering the value the relationship was designed to create.
 
Beyond the contract conclusion (white)

Beyond the contract

A global study of how disputes arise, escalate, and get resolved

Written by

Tim Cummins Follow me on LinkedIn

President
WorldCC

Resources

From webinars to articles and events we have a whole host of resources to help you on your journey to AI excellence.

AI in Contracting 2026 - Cover (low)-1

AI in contracting 2026

Curious to see how the AI revolution in contracting has progressed? Download the 2026 report, "AI in Contracting: From experimentation to impact," for key insights and analysis that provide critical context for the latest Adaptive Contracting findings and strategic trends.

webinar-1

Articles

Our Content Hub boasts an extensive collection of articles, delving into the trends, challenges, and innovations transforming commercial and contract management. As leaders in the field, we offer valuable insights and thought-provoking content, illuminating the evolving landscape of contract management.

AI Clinic 2026 resized

AI Contracting Clinic

As AI's role grows, this clinic moves beyond buzzwords to show what actually works. This series offers live case studies, frameworks, debates and examples of real business impact. Join practitioners and experts to solve contracting problems with AI and help you understand where AI fits in your contracting lifecycle. 

Become a member

Join now to access a range of benefits as part of the world's largest commerce and contracting community.

  • Become part of a global community and connect with other members at events and on online forums.
  • Participate in live webinars and sponsored webcasts with thought leaders and experts.
  • Attend local networking groups and regional or international conferences.
  • Access the latest research, reports, analytics, best practice templates and thought-leadership articles.
  • Become certified with our globally recognized training programs.
  • Gain one-on-one mentorship from our experts.
  • Receive regular news and industry updates.
  • Search and post jobs on our members job board.
  • Raise your professional reputation by contributing to our Content Hub, joining working groups, speaking at  conferences, and contributing to research.