Contract disputes between businesses, agents, clients and customers are becoming increasingly common. There are a whole host of reasons for this, not least of which is poor drafting of the Terms and Conditions used in the original contract. Before we discuss resolving contract disputes, it is worth providing a few tips on avoiding them in the first place.
The importance of your Terms and Conditions
Many disputes that we see at Else Solicitors could have been avoided if more attention was given to the original contract itself. Often the contract is little more than bullet point email shared between two parties, or a poorly worded document cobbled together from various internet sources. On several occasions we have seen disputes arise based on ‘handshake contracts’ and verbal contracts. These can still be covered by law, but can be harder and more costly to argue.
The most effective contracts are always based on watertight Terms and Conditions. They provide the legal framework for all business transactions and engagements, and as such can be integrated and cross referenced in all commercial contracts. If you have carefully drafted Terms and Conditions in place then it is often easier to head-off a potential dispute, and if this is still not sufficient then a solicitor will be able to use them as the backbone of your case. It will also show that you are serious about contract preparation and due diligence, which in itself can be enough to prevent potential disputes from being considered by third parties.
Common Causes of Contract Disputes
Contract disputes can arise from the simplest of things, for example the quality of the work delivered, quality of materials or product, delivery delays, damaged goods, late payment, and even negligence. Disputes are disruptive, stressful and damaging both financially and emotionally for the businesses and individuals involved. It is therefore essential that they are resolved quickly. The longer they drag on the harder and more expensive they become to fix, and the more likely you are to lose the longer-term relationship with the other party (which may be essential to the continuity of your business).
Advice on Resolving Contract Disputes
We recommend a three stage process to resolving contract disputes, namely:
- Resolve directly with the other party
- Agree to work through the dispute using a mediation service
- Employ an experienced dispute resolution solicitor to work on your behalf
Below we discuss each of these options, but in all cases it is essential that you keep a detailed record of all communication with the other party, including phone conversations (if possible). Try to collate everything in chronological order, along with any comments or notes of your own. This will save time and help a solicitor understand the dispute and advise appropriately.
- Resolving directly
It goes without saying that the best way (and most cost effective way) to resolve a potential dispute is to resolve the differences with the other party directly. In our experience the sooner that an issue is raised the greater the chance of resolving it. Disputes often arise because parties fail to discuss issues or concerns as soon as they arise, i.e. before any animosity builds up. If the issues can be resolved quickly and directly, then this also means the business relationship can be retained going forward, which may be important for business continuity and performance.
If the disagreement or dispute cannot be resolved directly then the next stage would be to consider using a qualified mediator. Mediation is a voluntary process in which an independent qualified person helps you to come to a mutually agreeable solution. Else Solicitors have several qualified mediators including Chris Else, the managing partner. We are also proud to be one of the founding partners of the Staffordshire Chamber of Commerce Mediation Service. This scheme helps businesses quickly resolve their commercial and contract disputes. Mediation is a much quicker and cheaper solution than litigation. In many contractual dispute cases, mediation can avoid generating a feeling of ‘bad blood’ and the business relationship can be retained, to the mutual benefit of both parties.
- Instruct a Dispute Resolution Solicitor
If mediation is not successful, or the other party refuses to consider it as an option, then you have little option other than to engage and instruct a dispute resolution solicitor. Specialist dispute resolution solicitors are trained to advise both your legal position and the merits of taking action (including the commercial implications and inherent risks). They will also be able to offer advice on the appropriate course of action available, thereby avoiding unnecessary costs and delays.
How can we help?
Else Solicitors have a highly experienced department of lawyers who recently won the Legal 500 ‘Dispute Resolution Team of the Year’ for the East Midlands (the industry leading Legal 500 ranks the top 500 law firms across the UK). If you need specific advice regarding contractual disputes then please contact Andy Rudkin (Partner, and Head of Dispute Resolution) via email email@example.com, or through our main office on 01283 526200.
If you need any advice on Terms & Conditions, or contract preparation, then please contact Adam Gilbert (Partner, and Head of Commercial Services) via email firstname.lastname@example.org or through our main office on 01283 526200.