Skip to content

Can I Sue Without a Contract for My Commercial Dispute?

Table of Contents

A contract is a legally binding agreement in which both parties to the commercial dispute must agree to the terms and carry out their obligations. Unfortunately, if you do not have a well-drafted contract in place for a business transaction, it could give rise to a business dispute. For example, if your business delivers goods to another company with a 30-day invoice payment and the other business fails to pay within 30 days. 

Commercial disputes can arise without a contract in place because, for example, specific issues occur that are not thought out in advance and agreed upon as contract terms. You may worry about what actions are available to you without a signed contract. For example, whether to proceed with alternative dispute resolution or take legal action in a court case. This article will explain whether you can sue without a contract for your commercial dispute.

Can I Sue Without a Contract for My Commercial Dispute?  

You will usually have a contract to do business with another company or sell goods or services to consumers. However, there may be instances where you do business with another company or person but do not have a contract in place. Perhaps you take the other party’s word for the business transaction, but later, they let you down.

Where you fall into a commercial dispute and no contract is in place, you can still try to sue the other party. Therefore, you may still start court litigation to resolve the commercial dispute. Alternatively, you may attempt alternative dispute proceedings (ADR), such as arbitration. 

Front page of publication
Guide to Resolving UK Business Disputes

This guide outlines how to resolve commercial disputes.

Download Now

However, whilst you may still be able to sue without a contract, there is a problematic issue you may have. This is proving that you did business in the first place and any money they may owe you. This is particularly true if you choose court proceedings to resolve the commercial dispute. Why? Because the burden of proof is on you as the claimant to prove what you argue. 

In court litigation, a judge will decide if the other company owes you money or not by:

  • what law applies to the situation;
  • the evidence that you have;
  • the proof that the other party (the defendant) provides; and
  • the balance of probabilities.

What Evidence Can I Provide for My Commercial Dispute? 

As pointed out earlier, it is possible to sue for your commercial dispute without a contract, but the major problem is that you have no contract as evidence of the dispute. However, there may be other things you can draw upon to prove the dispute. 

Types of Evidence 

For example, a bounced cheque is crucial evidence to prove that another company owes you money. Although cheques are less common than they used to be, hundreds of millions are still issued each year. Legally, a cheque is an individual or company saying they ‘promise to pay’, proving they owe you money. Similarly, if you had a direct debit with the other party and this bounced, it also proves they owe you money in the commercial dispute.

Although you may have no contract with another business in a commercial dispute, you will likely still issue them an invoice for the goods or services. This can also act as sufficient evidence for suing over a business disagreement.

Another potential piece of evidence to sue for your commercial dispute where no contract is in place include your actions before any court litigation. In court proceedings, a lawyer is a last resort for any commercial dispute, so usually, you will initially take formal methods to try to resolve it. 

For example, you may contact the other company by email and let them know payment is outstanding. They may respond and apologise with a promise to make a payment soon. This correspondence can act as evidence where you wish to sue without a commercial contract in place.

Sometimes, you draw up a contract and provide it to the other business, yet they do not sign it, meaning no contract exists. However, it could be evidence when suing if they acknowledge receipt of this. The reason is that a judge interpreted this as them agreeing to terms as they did this and did not provide alternative terms. 

Although you may not have a written contract, you may have a verbal one. For example, if your business makes sales over the telephone, you may record these to provide evidence.  Alternatively, another person may have heard the transaction take place. However, with the latter, they must be independent witnesses.  

Continue reading this article below the form
Need legal advice?
Call 0808 196 8584 for urgent assistance.
Otherwise, complete this form and we will contact you within one business day.

Key Takeaways

A commercial contract is a legally binding agreement between you and the other party, such as another business. Where you have a contract in place, it can direct you both on what to do if specific issues arise. Therefore, you could avoid a commercial dispute if you have a well-drafted contract. You may still pursue commercial litigation to resolve the conflict when this occurs. However, the key issue you will face is being able to provide evidence on the dispute and any debt owed. There are, however, ways to do this, as discussed in this article. 

For example, you can provide a bounced cheque as evidence of a ‘promise to pay’ before the court proceedings. Other evidence, for example, is to show that an unsigned contract exists and the other party raised no issues upon receipt. 

If you need help understanding whether you are 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 at 0808 196 8584 or visit our membership page.

Register for our free webinars

Protecting and Enforcing Your Brand

Online
Protect your brand from misuse and infringement. Register for our free webinar.
Register Now

Deal Structures 101: Understanding Equity, ASAs and Convertible Notes

Online
As a startup founder, understand your capital raising options. Register for our free webinar today.
Register Now

Common Legal Pitfalls for SaaS and Online Businesses

Online
Protect your online or SaaS business from common legal pitfalls. Register for our free webinar.
Register Now

GDPR Compliance Essentials for SMEs

Online
Ensure our business is compliant with GDPR and build trust with customers. Register for our free webinar.
Register Now
See more webinars >
Clare Farmer

Clare Farmer

Read all articles by Clare

About LegalVision

LegalVision is an innovative commercial law firm that provides businesses with affordable, unlimited and ongoing legal assistance through our membership. We operate in Australia, the United Kingdom and New Zealand.

Learn more

We’re an award-winning law firm

  • Award

    2024 Law Company of the Year Finalist - The Lawyer Awards

  • Award

    2024 Law Firm of the Year Finalist - Modern Law Private Client Awards

  • Award

    2023 Economic Innovator of the Year Finalist - The Spectator

  • Award

    2023 Law Company of the Year Finalist - The Lawyer Awards

  • Award

    2023 Future of Legal Services Innovation - Legal Innovation Awards