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Contract Disputes

At its most basic, a contract is a legally enforceable agreement requiring one party to fulfil an obligation to another, often in return for the payment of money.

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Contract Disputes

Contracts are typically recorded in writing however, an enforceable agreement can be made orally and contracts are formed where the following ‘key elements’ are all present:

  • Offer
  • Acceptance
  • Consideration
  • Intention to create legal relations
  • Certainty of terms

An area of dispute that often occurs is whether a legally enforceable agreement has, in fact, arisen.  This can include arguments about, for example, whether the parties intended to enter into a binding agreement, or whether the terms of the purported agreement were sufficiently clear to allow one party to seek to enforce them.

Even where it appears obvious that a contract has been formed (for example, where the agreement is in writing and signed by the parties), disputes are not uncommon.  Typical arguments that we see relate to disagreements over the meaning of the terms of the contract, the failure of one party to perform its obligations, including parties not making payment in accordance with the terms of the agreement.

Contracts are used in a wide variety of situations in day-to-day life, from agreements for the sale of goods to multi-million-pound construction contracts.

In certain situations, the law also implies terms into contracts.  The most obvious example of this is the terms that are applied into contracts for the sale of goods and supply of services under the Consumer Rights Act 2015, which applies to certain ‘consumer’ contracts entered on or after 1 October 2015.

Where there has been an alleged breach of contract, the innocent party may have several options in respect of the recourse available to them.  This can include a monetary claim for damages, or possibly other relief, such as an order from the court requiring the defaulting party to perform their obligations under the contract.

Contractual Disputes FAQ’s

Where can I get more advice on contractual disputes?

Contact Richardson Lissack for expert guidance on all issues relating to contractual disputes.

What are contractual disputes?

Breaches of contract can occur in a variety of circumstances where one party fails to perform their duty.

Contracts can either be in writing or arise orally where the necessary elements of a contract are present (offer, acceptance, consideration and intention).

Expert legal advice can assist in identifying the terms of the contract, what breaches have occurred and what claims may be available to a party (whether that is a claim for money or other relief, such as an order for performance of the contract terms).

How can a contractual breach arise?

A contractual breach can arise when one party has either not performed their duty, or not performed it to the standard indicated in the contract or within the stipulated timeframe. For example, a housebuilding company may be in breach of contract if some new homes are not of the required quality, or if the project is not completed on time.

What types of contractual breach are there?

There are two main types of contractual breach:

1. Material breach: This occurs when one of the parties fails to perform their duty to the extent that the contract is irreparable. The aggrieved party can now sue for damages.

2. Minor breach or immaterial breach: This occurs when there has been a less fundamental breach to the contract. Both parties still have an obligation to fulfil the contract but the aggrieved party is again able to sue for damages.

Are there alternatives to litigation over contractual breaches?

Many contractual disputes are resolved without the need for legal action. There are non-binding and binding options available.

Non-binding options

  • Negotiation
  • Mediation
  • Early neutral evaluation (where a neutral third party assists the two interested parties in evaluating the likely outcome of legal action)

Binding options

  • Arbitration
  • Expert Determination (ED)
  • Adjudication (specific to construction contracts)

What is the legal process for contractual disputes?

If it is not possible to resolve a dispute through the options above, an aggrieved party can take legal action against the party that has breached the contract.

This could result in:

  • Compensation for loss or damage
  • A specific performance court order
  • Repudiation (where one party formally states that it is unable or unwilling to fulfil the contract. The other party then has the option of terminating the contract or proceeding with litigation)

What are the best ways to avoid a contractual dispute?

Prevention is always better than the cure and it is worth taking steps when drawing up a contract to avoid the likelihood of problems arising. In particular it is vital that the contract is specific about:

  • The duties that are to be performed by both parties
  • The timeframe in which they are to be completed
  • How it will be determined if the duties have been performed in a satisfactory way
Prevention is better than a cure

How Richardson Lissack can help

Richardson Lissack provides civil litigation services to our clients in relation to a variety of contract disputes. The first step is typically to establish whether a contract has been formed and, if so, we will assess the terms of the contract and your rights under it. We will then seek to offer guidance on how best to achieve the desired outcome, whether that is by pursuing court proceedings or through the exploration of methods of alternative dispute resolution (or a combination of both).

Our lawyers are available to assist you and provide legal advice.

Contact London 020 3753 5352 or Manchester 0161 834 7284. Alternatively you can email info@richardsonlissack.co.uk

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