When dealing with a commercial contract dispute, the success of any legal action will depend on the meticulous analysis of each and every term in the contract by your legal team.
Through our dealings with many commercial contract disputes we have identified some of the most common types of contract or agreement that can give rise to a dispute.
A dispute over a contract covering the sale of goods and the supply of services
If you have a contractual dispute with another business involving the supply of services, or the sale of goods then our solicitors can help. In this type of contractual dispute, it is usually the case that the complainant is the one who has purchased the goods or services.
Typically the complainant will allege that the standard of the goods, or the quality of the service did not meet that which was specified in the contract. Sometimes the dispute is not over quality, but might be because the goods were delivered late, or were not fit for their intended purpose.
Our specialist solicitors can help if you are involved in a dispute over the sales of goods or the supply of services. Your solicitor will examine the exact terms of the contract in order to determine what, if any breaches of contract occurred, we can then provide you with advice about your legal options and assistance in calculating the level of compensation which you can reasonably expect from the other party.
Disputes over a contract for the sale of a business or shares in a business
Contracts covering the sale of a business, or shares in a business are amongst the most complex forms of commercial contract. It is not surprising then that these highly complex contracts can give rise to contractual disputes where one or both parties may seek independent legal advice to help resolve the dispute.
Disputes might arise during the sale of a business if there are warranty claims, unpaid deferred consideration and earn out provisions include within the contract. Any of these could trigger a dispute, as they will have a bearing on the amount of money paid to purchase the business, where the price paid may be linked to the performance of the business after the sale goes through.
An additional complication when disputing the price you have paid for a business might be the existence of time limitations for raising complaints. These limitations are often included within the contract of sale, so it is important that you seek legal advice from a specialist solicitor as soon as you become aware of any problems with the newly purchased business, such as lower-than-promised performance.
When a dispute occurs involving a commercial agent or a distribution agreement
If your business relies on agents to sell your products, then you should be aware of EU and UK legislation that governs the contracts you might enter into with your agents. Getting professional legal advice if a dispute occurs between a business and an agent of that business can help to avoid costly court action.
Similarly, contracts that set down arrangements for distribution of your products can also be a source of disputes.
Common causes of disputes arising from distribution contracts include exclusivity, where an agent or retailer may have sole rights to sell your product in a country or a certain geographical area. A dispute might occur if you knowingly or unknowingly allow your product to be sold by another agent or retailer within that area, in breach of the exclusivity agreement.
A dispute might also occur if a distribution contract includes provisions for bonuses to be paid based on sales or performance, or if there are issues with credit.
Problems with franchising a business and franchise agreements
In order to successfully franchise a business, secure contracts must be in place. A franchise contract should address the likely causes of franchise disputes. These including issues of misselling, for example if a franchisee was told that there was a greater demand for the franchise in a certain area than there actually was, or if they were given unrealistic projections of future earnings and opportunities for expansion.
The advice of a specialist solicitor should also be obtained if the actions of one or more franchisees are threatening the security of the franchise network. Any dispute between franchisees or between a franchisee and the franchisor could have very serious repercussions for the franchise as a whole, so getting legal advice as soon as you become aware of a dispute within the franchise system is vital to avoid both costly courtroom litigation and damage to the franchise.
Disputes concerning consultancy agreements
There are many reasons why your business might choose to employ consultants. You might wish to draw on the expertise of past directors of the business or other key members of staff, for example if the business is in the process of changing ownership.
At other times you might need someone with specific knowledge, if you are planning on diversifying or entering a new area of business. Similarly, consultants can also help when it comes to streamlining the internal procedures and management practices within your business.
Properly drafted consultancy contracts can help to reduce the likelihood that a dispute will occur as a result of the use by your business of a consultant or consultants. However, if a dispute does occur, for example if bad advice given by the consultant has caused harm to your business, then you should obtain legal advice at the earliest opportunity.