Contract Disputes – How To Avoid Them
Contract disputes commonly arise out of the sale of goods and services, whether there is a failure to pay or there is some issue relating to the quality of the goods and services provided.
Examples of Disputes
An individual purchases a car from a dealership based upon it’s service condition and reliability. After a few months the engine fails. The purchaser would be entitled to make a claim for breach of contract against the car dealership pursuant to the Consumer Rights Act 2015.
A homeowner pays a builder to build an extension their home. The end result is a structurally unsound extension as the materials used were of inferior quality. This has resulted in the roof leaking, rising damp and numerous other problems. In such a case the home owner would have a claim against the builder pursuant to the Consumer Rights Act.
Under the terms of a contract, a food factory has an old floor replaced where production takes place. Unfortunately, the new floor is defective. As a result hygiene issues have arisen which has led to the loss of customers. The production part of the factory has to be closed temporarily to allow for the defective floor to be repaired. The down-time has caused a loss of sales. Under the terms of the contract the food factory can sue the installers of the defective floor for damages to put the floor right and for loss of sales.
Not all complaints of defective goods or poor service are warranted. It is important to analyse the contract between the parties to establish whether there is a genuine contractual dispute. This is why it is vital that the contract between the parties is drafted with skill and expertise to ensure that parties are protected.
Many contract disputes arise due to a failure to include relevant clauses within a contract or that the contract is ambiguous. It is essential that the contract provides certainty and clarity in any business relationship. The worst types of contact are oral contracts as there is often little evidence of the parties intentions.
A business (even the best run organisations) will inevitably face some sort of contract dispute arising out of its relationships whether it’s with its customers, suppliers, banks, agents or insurers. There is no “one size fits all” solution to contract dispute resolution, therefore it is important to get it right from the beginning to avoid problems in the future.
At Kumari Hart Solicitors we have the experience and expertise to help with your contractual needs, whether it be from advising on terms of contract or handling disputes arising from breach of contract. Click here for more information.