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If your business relies on manufacturers to sell products, the last thing you want is a dispute with the manufacturer. A business dispute with a manufacturer can bring your entire business to a halt and lead to the loss of a business relationship. Therefore, this article will explore three key tips on what you can do to resolve a dispute with your manufacturer.
This guide outlines how to resolve commercial disputes.
Why Should Businesses Resolve Manufacturing Disputes Quickly?
There is a lot that can go wrong with a manufacturer. For example, the:
- products manufactured might be faulty;
- products manufactured might fail to meet the specifications your business requested;
- deadlines for delivery of the products have not been met; or
- payments owed are in dispute.
It is vital to resolve the dispute as soon as possible. When using a manufacturer, businesses trust the manufacturer to conduct business accurately and efficiently. Often, a business will rely on the manufacturer to produce specific products to be sold to end-users. As a result, disputes can have a negative impact on supply chains and overall business.
Manufacturer disputes are particularly high-risk and stressful. However, there are various steps you can take to resolve the dispute.
1. Check Your Manufacturing Agreement
From the outset, reviewing your agreement with the manufacturer is critical. You will need to carefully review your agreement to know where you stand in the dispute.
You should review your agreement to check what terms of your agreement the manufacturer has breached. For example, have they failed to deliver on time? Have they failed to manufacture the products to the specifications set out in your contract?
Additionally, you should consider whether the contract contains specific provisions on how a dispute should be resolved. Many well-drafted contracts will specify that the parties should first discuss disputes informally. You will need to follow the procedure set out in your contract.
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2. Try Alternative Dispute Resolution Procedures
Going to court is costly and time-consuming. It is often a last resort. If possible, and if your contract permits, you should consider Alternative Dispute Resolution (‘ADR’). These are methods to resolve a dispute without going to court.
There are various methods of ADR. For a manufacturing relationship, there are better options than going to court. Most businesses will want to save their relationship so that business can continue with the manufacturer as usual.
Commonly used ADR methods include the following:
| ADR Method | Explanation |
| Negotiation | Here, the customer and manufacturer will negotiate to resolve the dispute through compromise. The principle is to have constructive discussions to reach a satisfactory resolution. This is often the cheapest way to resolve a dispute. |
| Mediation and Conciliation | In mediation, an independent, professional mediator will help the customer and manufacturer settle their dispute. Conciliation is another option, similar to mediation. In conciliation, a third-party conciliator is appointed to help reach a resolution between the manufacturer and the customer. |
| Arbitration | Arbitration is more formal and involves the dispute being heard by an independent arbitrator. Often, the decision made will be binding on the parties. This is a quicker and cheaper way to resolve a dispute with a manufacturer, as opposed to going to court. It is worth noting that some contracts specify arbitration to resolve disputes rather than going to court. Again, check your contract to see if a particular process has been agreed. |
If you are still not able to reach a resolution through ADR, then the court may be the final resort. This will involve taking a legal claim against the manufacturer to court, which will be heard by a judge. The judge will hear evidence and decide how the dispute should be resolved. However, in a manufacturing relationship, court cases can be extremely damaging.
3. Consider The Seriousness Of The Dispute And Take Legal Advice
Despite the number of options available, it is essential to take a practical view on resolving the dispute. If the dispute relates to minor issues, consider having a meeting with the manufacturer and asking them to rectify them. This approach could resolve the issue and save a lot of time, cost and stress.
However, more high-value and complex disputes will need further thought. Manufacturing disputes can be extremely complicated.
In this case, legal advice can be extremely valuable. Taking advice from a lawyer on your options could help you understand:
- how serious the dispute is;
- what your options are; and
- the best way to achieve your end goal.
Because manufacturing disputes are particularly risky for business operations, legal advice could help you understand if it is worth pursuing a legal claim. Although legal advice will cost your business, it could save you a lot of money in the long run.
Key Takeaways
Manufacturing disputes can be extremely challenging and high-risk. You should carefully check your contract, consider your options and try to resolve the dispute through ADR. Legal advice can help you understand the best option for your dispute and reach a quicker resolution.
If you need help with a manufacturer dispute, our experienced disputes 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.
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