Contract Disputes

Contract disputes arise from time to time for most businesses. Often these disputes can be dealt with quickly and informally, but on occasion they are more serious and the legal position and further action needs to be considered.
We regularly advise clients in relation to business issues that have arisen, either to give ‘behind the scenes’ advice at an early stage of a dispute, or to represent clients in resolving the contract dispute through litigation or other dispute resolution processes.

In some cases the dispute can be more difficult to solve, and may be of high value and importance. We have wide experience in handling contract disputes, ranging from high value disputes to those of a smaller value.

What types of commercial contract disputes are there?

These are most commonly disputes with a supplier or customer. They may relate to goods or services that are being purchased or sold.

What are the key issues in considering a contract dispute?

The key issues in contract disputes are:

  • What were the terms of the contract? This may be clear from written agreement or it may involve fact finding by examining correspondence, prior business arrangements or verbal discussions. It may also involve certain terms of contract that are implied by law or whether standard terms of business were incorporated into the business arrangement and if so whether those terms were enforceable.
  • Has there been a breach of the terms of the contract? This relates to the actual subject matter of the case and whether what has gone wrong actually relates to the contractual terms between the parties. This is sometimes straightforward, though it can on occasion require a detailed consideration of the subject matter of the dispute, including expert evidence where the issue if of a technical nature.
  • If there has been a breach, what loss or damage has a party suffered as a consequence? Not all losses are necessarily recoverable. There may be provisions in a contract that limit a party’s right to claim damages, or it may be that the loss suffered is not sufficiently connected to the breach.

What types of commercial contract dispute are there?

Contract disputes are wide ranging in nature but can include:

  • Claims for payment of sums due, where the opponent defends the claim on the basis that there has been a breach of contract
  • Claims against another party on the basis that the product or service has not been delivered in accordance with the terms of the contract
  • Issues relating to whether there has been a fundamental breach of contract so that the contract has been repudiated and the parties can treat themselves as being discharged from future obligations under the contract
  • Disputes between a business and its sales agents, typically involving a claim for commission or right to compensation
  • Issues arising as to whether a selling party has retained rights in products sold in the event of non-payment for goods (Retention of Title clauses)

How can commercial contract disputes be resolved?

Most disputes are resolved by agreement. This can be early agreement arrived at following discussion by the parties, or it may involve lawyers entering into correspondence and the potential issuing of court proceedings.

Often forms of Alternative Dispute Resolution (ADR), sometimes referred to as Negotiated Dispute Resolution (NDR), are used. This can include mediation where the parties appoint a facilitator to help them achieve settlement. This can take place before or during court proceedings and can provide an effective and practical forum to resolve disputes. Such methods can be especially helpful in preserving trading relationships.

Increasingly contracts and terms and conditions have methods of dispute resolution built in to them that often need to be pursued before court proceedings can be issued. It is therefore important to understand the options and best strategy for the resolution of commercial contract disputes.