Contracts come into existence more often than people may realise, and simply because something is not written down does not mean that a contractual obligation has not arisen – nor that it cannot be breached.
Although some contracts will only operate if made in writing, many agreements come into existence on little more than a conversation or a short exchange of emails.
People and businesses will often find themselves in a contractual dispute because:
- A party has not paid them;
- A party has not provided the goods or services they were supposed to; or
- A party is refusing to do something they were supposed to / is doing something they were not supposed to.
Although many parties will be aware that they are at risk of breaching their contractual obligations long before they acually do, often this is not discussed with the other party to the contract until after the breach has occurred – leaving limited options open to the parties to renegotiate the obligation or find a route of compromise. This can lead to serious and costly ramifications, particularly if there are a chain of agreements / obligations.
Common areas for these disputes are:
- Contracts for the Sale of Goods
- Contracts for the Provision of Services
- Partnership Agreements
- Shareholder Agreements
- Joint Venture Agreements
- Property Transactions
- Licensing Agreements
If a contract says a party must pay to the end of a contract, can I simply demand this money?
Some contracts will make provision that in the event of early termination, the terminating party must pay a specific amount, or for a further period. The Court will consider a distinction between clauses which are considered ‘penalty clauses’ and those which are considered ‘liquidated damages’ clauses. In some instances they will be enforceable, in others they will not. If you have any questions over whether you can avoid these provisions / enforce these provisions you should seek legal advice.
Can I go straight to Court?
First, any party thinking of commencing Court proceedings will need to check the contract for a jurisdiction clause (whether they are considering using the correct Court), a governing law clause (making sure they are relying on the correct law) and a dispute mechanism clause (what to do in the event of a dispute). Finally, you will need to consider whether any of the pre-action protocols apply. There will be some instances (such as seeking to freeze a party’s assets) where you will not want them to be aware of any proceedings in advance, but ultimately issuing too early, in the wrong Court, or via the wrong process could lead to the steps being invalid, premature or expose you to your opponent’s costs.
Contact Our Contract Disputes Solicitors
Whether you are looking to recover money, goods, compel a party to comply with a contractual obligation, defend against allegations of breach of contract, or are seeking to extract yourself from a contract you now cannot comply with, Bishop & Sewell have a team of lawyers able to advise you on the options which are available to you.