Contract Disputes

Understanding contractual disputes

Contracts are a fundamental part of daily life and commercial operations. From routine retail transactions to formal corporate agreements, we enter into legally binding contracts far more frequently than we realize. Typically, it is only when an agreement breaks down that the underlying terms and legal implications are closely scrutinized. 

When a contractual dispute arises, securing professional legal advice at an early stage is essential. Contract law is highly technical, and misinterpreting your rights or obligations can result in severe financial and operational consequences. 

Key techinical elements of a contracual dispute

Resolving a contractual dispute requires careful assessment of crucial legal factors, including:

1) Formation: Prior to commencing any claim, we must first establish there wa a legally binding agreement. Agreements can be in writing but can also be verbal or implied by conduct. 

2) Contractual Terms: If there has been a legally binding contract, the next stage is to determine what the terms of the contract are. Terms can be express terms (terms expressly stated by the parties), as we all terms which are automatically incorporated by was of statute or common law. 

3) Breach of Contract: Once we have established there is a legally binding contract and. what the terms of that contract were, we must then assess whether a party hsa failed to fulfill their obligations without a lawful excuse. We must also consider what type of breach has occurred, as breaching different types of contractual term can impact the remedies and losses available to a party. 

4) Remedies and Quantifuing Loss: Finally, we must assess what losses have been occured and, what losses in law you are entitled to recover as damages. Further, we must assess whether the breach of contract entitles you to withdraw from the contract and not perform your obligations under the agreement. 

Pre-Action protocols

Having established you have a claim for breach of contract, you should not rush to issue proceedings in the County Court. The modern court system expects a potential claimant to have set out their claim against the defendant (the person in breach) and given them the opportunity to accept the claim and resolve it, or set out the reasons why they do not accept your claim. The courts have the power to heavily penalise a party who does not follow the Pre-Action Protocols and it is important to take independent legal advice if you are in doubt. 

Alternative Dispute Resolution

As you will often see in the media, the court system is in under pressure for many reasons, including the number of cases which are now going to court. Going to court can be an expensive and time consuming process and the courts expert parties to engage in Alternative Dispute Resolution (commonly referred to as "ADR"). ADR provides an alternative way for disputes to be resolved, rather than engaging in the traditional court route. These include: 

1) Negotiation: Direct or lawyer-led discussions to reach an amicable settlement. 

2) Mediation: A confidential process which is facilitated by an independent neutral third party to find common ground and a settlement agreeable to both parties. 

3) Arbitration: An alternative form of court procedure, which is heard in private, where a legally trained third party makes a binding decision on the parties. 

It is expected that parties will engage in ADR in good faith. The courts have the power to heavily penalise a party who unreasonably refuses to participate in ADR and can result in severe costs sanctions. It is, therefore, important to seek independent legal advice to ensure you fully comply with the procedures expected by the court.