Tips to Avoid Contractual Complaints From Customers

Customer relationships are critical for every business. Businesses need to develop a relationship of trust and confidence with customers. However, it is equally vital that the business is protected from a contractual perspective. Customer complaints over contractual issues can be extremely time-consuming and stressful for any business. This article will explore some key ways to avoid contractual complaints from customers.

Supplier Contracts Checklist

Download this free Supplier Contracts Checklist to ensure your contracts will meet your business’ needs.

Download Now

Why Customer Complaints Arise

Complaints and disputes from customers can occur for various reasons. For example, a customer may be unhappy because:

• you have not delivered products or services on time;
• there are defects or problems with the products or services received; or
• you have misused their information or personal data. 

Tips to Avoid Customer Complaints

The following are a few ways in which you can prevent contractual complaints from arising.

Document What You Agree With Your Customer

A customer contract is one of your business’s most important legal documents and can help resolve customer complaints and issues. Your contract should set out robust legal terms, which will help protect you if things go wrong.

If parties agree to contracts orally but do not document them in writing, they can forget key details. Over time, this could lead to misunderstandings and complaints from customers.

Misunderstandings and mismatched expectations are one of the key reasons customer complaints arise in business. Even if there is a strong relationship of trust with the other party, things could go wrong at any time. Therefore, you should always ensure that you enter a written contract with your customer to help avoid contractual disputes.

Disputes and litigation often arise when oral agreements go wrong, particularly where one party defaults on what they agreed orally, and it is difficult for the other party to prove this without any evidence. By precisely documenting what products or services you are delivering, you can easily locate and evidence the terms of your agreement.

Clearly Outline Your Contractual Obligations

Lack of clarity often leads to problems and complaints from customers. Mismatched customer expectations are a very common cause of disputes. However, to avoid this risk, a contract should document clear contractual obligations of each party and reduce risk.

For instance, your contract should include a clear ‘Scope of Work’ or ‘Order Form’ to set out the exact details of what products or services you will deliver. By including clear details of what you will deliver, when, where, and how, there will be less risk of a customer complaining that you have failed to deliver what you promised.

Sometimes, a customer may request a particularly bespoke product or service. If that is the case, you should agree on a clear specification with them from the outset and document it in your contract. Likewise, you should fully understand what the customer wants and clarify any queries before entering into a contract with them.

Your contract should set out (amongst other terms) the following terms:

• what the contract term is, including when the contract starts and how parties can end it;
• specific payment terms;
• the levels of quality and performance expected of you as a supplier;
• the timeframes for delivery of the products or services; and
• a process for resolving disputes.

Clearly documenting the terms of your agreement and the scope of each party’s obligations will help ensure that the contract runs smoothly and there will be less chance of customer complaints.

Understand the Contract and Comply With It

Sometimes, particularly when a supplier is servicing several clients, keeping track of contractual commitments can be difficult. However, this is critical.

As a supplier, you should fully understand your contractual obligations and when you need to fulfil them. Failing to do so could result in you breaching your obligations and facing a breach of contract claim from the customer.

By understanding your contractual obligations and sticking to them, you are less likely to face customer complaints.

Include a Procedure to Resolve Customer Complaints

Unfortunately, complaints and disputes from customers do arise. This can be particularly challenging for businesses. However, your customer contract can help address this by providing a clear way to resolve customer complaints.

It is good practice to include a dispute resolution clause in all of your commercial contracts. Doing so ensures that parties understand the correct process to take if a problem arises. Customer contracts often specify that the parties should first discuss disputes informally, such as through discussion and negotiation.

Both parties will typically need to follow the dispute resolution procedure set out in the contract before either side can pursue more formal legal action (such as court action). As such, alternative dispute resolution methods can assist your business to resolve disputes quickly. Further, including this clause in your customer contract helps you manage customer relationships and keep your customers happy.

Key Takeaways

There are various ways in which you can avoid contractual complaints from customers. For example, you can include key terms in your customer contracts to both prevent complaints from arising and amicably resolve any complaints. Prevention is always better than cure when it comes to customer complaints and disputes. All suppliers should invest in robust and well-drafted customer contracts to help them minimise risk and deal with the problems that arise. 

If you need help drawing up commercial contracts, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.