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Whether you are a company, partnership or sole trader acting in the course of business or an individual consumer our experienced Disputes and Litigation Department can advise you in relation to all aspects of contractual disputes relating to the supply of services and/or goods.
Please contact our Disputes and Litigation Department on our mobile friendly number 033 33 22 1000 or 0800 987 8156 to arrange a meeting and speak to a Solicitor. Alternatively, you can email us at firstname.lastname@example.org for more information.
A valid contract requires that there be:-
A contract can be written or oral (or both) and can be implied by conduct (in relevant circumstances terms may be incorporated by a course of dealing) or entered into electronically.
A battle of the forms may arise where both parties seek to incorporate their standard terms into the contract.
Issues as to the validity of a contract may also arise in respect of issues such as illegality of object, lack of capacity or lack of authority. Each of these non-exhaustive factors can give rise to and complicate contractual disputes.
Even if there does not appear to be a valid contract it may still be possible to rely on the law of restitution for a remedy as an action for Quantum meruit (often in respect of services supplied) or Quantum valebat (for goods supplied). Such claims may also be relevant where the contract does not fix the price to be paid and a reasonable price is due or works outside the contract are carried out at the customer’s request.
It is no defence for a party to state at a later time that they did not read the written terms of a contract. A written contract is binding even if the contracting party signed without reading it or its terms were missing but clearly stated to be available on request. Similarly mistakes will often have no impact on a contract’s formation or terms. Parties will be held to the bargain they have made (even if it is a commercially bad bargain) despite any alleged misunderstanding as to the legal effect or any underlying rights. The Court may correct a mistake to bring the terms of the contract inline with what it determines to have been the parties’ intentions so as to do justice in the case. The situation may be different where one party has misled the other in which case the contract may be voidable where the innocent party acts promptly.
Businesses entering into off premises and distance contracts with consumers via a website (or otherwise) will need to comply with additional rules and regulations such as The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. Terms and conditions (or at the very least their existence) must be brought to the attention of the customer to ensure incorporation such as by way of link and acceptance button and available in a way that allows the consumer to store and reproduce them in a durable form.
For the purposes of online purchases business websites must:-
The contract must be confirmed and a durable copy thereof provided as soon as possible for example with by way of email and in any event no later than the date of delivery of goods or commence of the supply of services. Unless the express terms of the contract provide otherwise goods must be delivered without undue delay and in any event not more than 30 days after the date the contract is entered into.
A trader must not begin the supply of a service before the end of the cancellation period unless the consumer has made an express request (in a durable format). In the case of a service other than supply of water, gas, electricity or district heating the consumer will no longer have a right to cancel a service contract if the service has been fully performed, and performance of the service began after a request by the consumer for the supply to begin before the end of the cancellation period with the acknowledgement that they would lose that right once the contract had been fully performed by the trader. Proportionate payment will be due in respect of any services supplied as requested during the cancellation period up to the point when the trader is informed of the consumer’s decision to cancel the contract.
Contractual disputes often arise where one party has breached an express of implied term of a contract by failing to perform wholly or partly their obligations under the contract such as:-
Under the mitigation principle a party must take reasonable steps to mitigate their losses if possible. However a party that has suffered foreseeable loss as a consequence of a breach of contract having regard to the scope of an implied assumption of responsibility by the Defendant in the contract may be able to seek:-
Just because a loss would not have occurred but for the breach does not mean it will always be recoverable. Rules relating to the following factors may reduce of defeat a claim for damages:-
A refusal to accept an offer made by the Defendant may constitute a failure to mitigate.
A seller may seek to include a retention of title clause in its terms and conditions which provides that title to the goods is retained by the seller until it has received full payment for the goods. The purpose of such a clause is to give the seller priority to the goods over secured and unsecured creditors of the buyer if the buyer fails to make payment by reclaiming possession of the goods.
A retention of title clause may include a right for the seller to enter the buyer’s premises for the purposes of repossessing the goods. Absent such a clause the seller will be committing a trespass. Contractual provision may also include a requirement that the buyer must store the subject goods separately from goods belonging to third parties and marked as being the seller’s property to assist in identification of goods should repossession prove necessary.
A seller may seek to broaden the ambit of a retention of title clause by way of an “all monies clause” which reserves legal and beneficial title of the goods supplied until the buyer has paid not only for particular goods supplied under a discrete invoice but all other monies owed to the seller in respect of any other goods supplied.
When both parties are acting during the course of business they may seek to limit their liability in respect of certain matters. Such clauses will be subject to the provisions of UCTA under which:-
It may be possible to avoid a breach of contract and legal proceedings by seeking to vary a contract ensuring that consideration (unless executed as a deed) and formality requirements are satisfied and subject to any third-party rights. Many contracts will provide that they can only be varied in writing.
Alternatively termination of the contract may be beneficial. Termination excuses all parties from further performance of their primary obligations after the termination date however it should be borne in mind that some duties survive including the duty to pay damages for a breach already committed. Abandonment by each party of their right to enforcement can constitute valid consideration for the discharge. Where the parties wish to continue their business relationship this may give rise to replacement with a new contract. Termination is not the same as rescission which refers to the situation where a contract is undone as though it has never existed which may include provision to reverse performance already delivered, not to enforce obligations accrued under the original contract and/or extinction of existing liabilities.
A third party may be willing to take on the benefits and obligations of a particular contractual relationship. In such circumstances novation may be possible which terminates the original contract and replaces it with another introducing a third party who takes up duplicate rights and obligations of the original contract. The novation agreement must be signed by all the parties to the original agreement plus the incoming party. Express provision should be made setting out who is to be responsible for the outgoing party’s pre-novation liabilities.
It may be necessary to consider whether there has been an assignment of a relevant contract under which a benefit of the original contract has been transferred to another party. It is not possible to transfer the burden of a contract by way of assignment so outgoing parties should seek to protect their position in respect of existing and future liability.
Legal costs incurred as a result of a breach of contract fall within the jurisdiction of the Court’s discretionary costs regime and cannot be claimed as damages at common law notwithstanding that they are caused by the breach. The general rule in relation to is that costs follows the event i.e. the unsuccessful party will be ordered to pay the costs of the successful party.
Where a contract provides for the recovery of legal costs they are assessed on an indemnity basis meaning that whilst unreasonable costs are irrecoverable disproportionate costs are recoverable.
Our specialist solicitors can advise you in respect of litigation risks including costs and best practices to adopt in an effort to mitigate the same.
For more information as to how we can assist you with a contractual dispute or breach of contract please contact our Disputes and Litigation Department on our mobile friendly number 033 33 22 1000 or 0800 987 8156 to arrange a meeting and speak to a Solicitor. Alternatively, you can email us at email@example.com for more information.
This content is provided free of charge for information purposes only. It does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the contents, or for any consequences of relying on it, is assumed or accepted by Kew Law LLP.
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