How Can I Avoid a Contractual Dispute?

Posted By: on 22nd July 2024 | Category: Advice, Blog, Dispute Resolution

Many commercial relationships between parties are governed by a contract. For example, there will usually be a contract between a business and its customers for the provision of goods or services. Unfortunately, things sometimes go wrong and this can lead to a contractual dispute between the parties.

We can help you when a contractual dispute arises, however there are some things you can do to potentially improve your position or possibly even avoid a dispute arising at all:

1. Written Contract – In an ideal world, you should negotiate the contractual terms and record them in writing. Although an oral contract can still be binding on the parties, it is usually easier if there is a contemporaneous written record of what is agreed. If you do have a written contract in place, make sure that it is properly completed and executed. For example, you should ensure that there are no gaps or square brackets left in the document. Once it is finalised, the contract should be signed by both parties and the signed copy should be stored securely.

2. “Battle of the Forms” – Sometimes a contract will be formed by an exchange of documents between the parties, rather than a self-contained written contract, with each party attempting to conclude the deal on the basis of its own standard terms and conditions. This is known as the “Battle of the Forms”. In general terms, the party who “fired the last shot” before acceptance or performance of the contract will prevail (however there are some exceptions). If you do business in this way, you should endeavour to ensure that your terms and conditions are sent immediately prior to acceptance or performance of the contract, or you might wish to consider a framework agreement governing all contracts between the parties to avoid the “Battle of the Forms” altogether.

3. Beware Unfair Contract Terms – Even if the parties have negotiated and agreed contractual terms between them, there is legislation concerning unfair contract terms which will impact whether or not those terms can be enforced. For example, the Consumer Rights Act 2015 prohibits parties from limiting or excluding liability for death or personal injury caused by negligence. The Unfair Contract Terms Act 1977 provides that clauses attempting to limit or exclude liability may be void or may only be enforceable if they are reasonable. Similarly, if a contract provision allows for damages which are disproportionate to the actual loss suffered then that may be considered to be a penalty and might be unenforceable.

4. Stick to the Contract – It might sound obvious, but make sure that you (and your staff) are aware of what the contract says and what you need to do in order to comply with it. If a dispute arises, it is a good idea to familiarise yourself with the dispute resolution clauses in your contract and any provisions regarding termination of the contract.

If you would like further details on how we can help you with a contractual dispute, please contact Liane Simmonds in our Dispute Resolution Team.

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