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As a business owner, you interact with other businesses and customers when you conduct business. Your business relationships, however, will only sometimes go smoothly, potentially resulting in business disagreements. These commercial disputes can involve a variety of issues. One type of commercial dispute is a contractual dispute, a disagreement over a written contract. This article will explain how your business should deal with commercial contract disputes.
What is a Contractual Dispute?
A contract is a legally binding agreement between you and another business or consumer. It will detail what you agree to do together, such as what one party may provide and the other pay for. A contractual dispute is a type of commercial dispute.
This is where the parties to the business contract disagree on a part of something associated with it. Therefore, it could be where you:
- disagree on what is meant by a particular contractual term; or
- one of you does not fulfil a contractual obligation.
How Should My Business Deal With a Contractual Dispute?
If you encounter a contractual dispute within your business activities, you must understand how to deal with this.
Contract Review
The first action in a contract dispute is to look at the contract relating to the business disagreement. This will help you to establish whether it is a legally binding contract. It will also help establish if the agreement covers the type of contractual dispute and, if so, which contractual clause applies.
A well-drafted commercial contract will also detail:
- what remedies may be available for the breach depending on what it is;
- what the effects of the contractual breach are on the contract;
- information about how to resolve a dispute; and
- which country’s law applies to any legal dispute.
Evidence Review
When you deal with a contractual commercial, you need to ensure you have evidence to support your argument. Therefore, if the contractual dispute is regarding a breach of the contract, then you will need to provide evidence to support the violation. You will also need to provide proof that shows your loss.
Evidence for a contractual dispute could, for example, include the following:
- photographs;
- invoices;
- witnesses; or
- the contract.
Alternative Dispute Resolution (ADR)
When dealing with a business contractual dispute, you must consider alternatives to commercial litigation. This is because court proceedings can be lengthy and expensive.
You may want to consider, for example:
- mediation;
- arbitration;
- early neutral evaluation (ENE);
- expert determination; and
- adjudication.
Pre-Action Protocol
Before you take court litigation for your commercial contractual dispute, the law says that parties must carry out the relevant Pre-Action Protocols first. These are in place to help you to settle out of court.
This guide outlines how to resolve commercial disputes.
Otherwise, a court may order you to pay costs, even if you win the case.
Litigation
You will receive instructions from the court when you deal with a contractual dispute through litigation. These will include what you need to do and the relevant deadlines.
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Key Takeaways
A contractual dispute is a type of commercial dispute. It can occur when you have a contract with another person or business and disagree with an aspect of it. If you become part of a contractual dispute, it is essential to know what to do. The first thing is to review the commercial contract to ensure it is legally binding and what it says about the contractual dispute. It would help if you looked at what evidence you have to support your argument in the contractual dispute.
After this, consider if there is another way you can replace the dispute, such as, for example, a form of alternative dispute resolution (ADR). If you do pursue litigation, you must carry out the Pre-Action Protocol first. When you pursue litigation, the court will give you and the other party instructions on how to proceed with the dispute.
If you need help understanding how your business should deal with a commercial contractual dispute in the UK, LegalVision’s experienced disputes and litigation solicitors 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. So call us today on 0808 196 8584 or visit our membership page.
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