Handling Contractual Disputes | ©Mr Daniel M. Fisher | How to Negotiate a Fairer Deal for Yourself.
- ©Mr Daniel M. Fisher
- Sep 30
- 5 min read
We look at how to stop or re-negotiate a contract, which may be ended by a termination notice where one party brings the contract to an end by giving notice to the other party. Or performance where each party has completed his or her side of the bargain and nothing more remains to be done.
An agreement where the parties may decide to end the contract (with or without changes) and mutually abandon their obligations. Or by breach which in this case the injured party is entitled to claim damages or compensation for the loss caused by the breach. The aim is to put the person not at fault in the same financial position had the contract been performed in its entirety.
The contract may expressly provide what should be paid if a breach or, if litigation is necessary, the court will decide. If there is a breach of a condition of the contract or an important term the innocent person may treat the contract as at an end and sue. For example, if a promoter engages an artist for two separate performances and agrees to pay a fee after each but fails to pay after the first night (this in breach of the agreement) the artist is entitled to terminate the contract, refuse to perform again, and sue for damages.
A force majeure clause in a contract may say that a person will not be in breach of the contract if the reason they have failed to comply is outside their reasonable control. This might arise if, due to illness, traffic delays, or extreme weather conditions, the artist is unable to reach the venue in time. So, frustration occurs where, through no fault of either party, it becomes impossible to conduct the contract which automatically ends. For example, the contract could be frustrated if the venue were burnt down, or the artist dies or is too ill to carry it out.
If no written contract has been signed, the likelihood of handling contractual disputes can increase, and these are often the hardest disputes to resolve. Where there is a written contract, disputes tend to fall into three categories, “Not in the Contract.”
Where disputes arise over matters not dealt with at all in the contract, e.g. as the parties did not think to deal with a particular issue, it will usually be necessary to reach agreement on the issue in question and then embody this in a signed contract or letter, to avoid future argument. “Different Interpretation:” in disputes over interpretation or meaning of words it may be necessary to take expert advice from a solicitor on the proper meaning of the contract provisions.
Disputes of this kind most commonly occur when no solicitor was involved in drawing up the original contract, and if the solicitor doubts your interpretation, you would usually be best advised to compromise, since there is rarely much sense in taking the risk of court action over the meaning of words. “Breach of contract” where one party supports that the other has ignored the terms of the contract, for instance by not paying a fee on time which leads to the other party not following his/her obligations, under a ‘tit-for-tat’ arrangement, and the dispute escalates.
If handling a contractual dispute set a deadline for action, in cases where the other party has simply failed, without any proper excuse, to do what the contract clearly called for, and telephone calls have failed to work, you should write a letter as soon as possible clearly pointing out the failure and requesting that it be remedied by a certain stated time.
The letter might also say that if the breach of contract is not made good by the deadline you will have no alternative but to refer the matter to a solicitor and in cases you might directly threaten to issue legal proceedings.
However, it is never wise to threaten something if you are not prepared to carry it through. Otherwise, your bluff may be called and your failure to follow through the threat will be seen as a sign that your case is weak, or that you do not have the money to pursue it.
If the deadline expires then consider sending a solicitor’s letter asking them to write a letter on your behalf. This is often effective, since it shows that you have the will to pursue your claim and need not be expensive. However, always make sure the solicitor knows what you want and make it clear that they do not take any further steps, or run up further costs, without your instruction.
If all else fails, you may need to take the dispute to court. However, this is often the last resort, since court proceedings can be expensive and lengthy, and the outcome is often uncertain. Also, the other contract party may have more money than you to risk losing in court. However, there are many cases where you should not be put off taking matters to court.
This might be where there is no real argument under the contract, the other party is simply refusing to do what he or she has agreed, particularly where the other party is refusing to pay you money that is clearly owed, or that your copyright is being blatantly ignored or infringed because, issuing a writ sometimes is the only way to ensure you are taken seriously.
In renegotiating a contract with some contractual disputes, you may need to consider a compromise.
• Think before you state a threat in case your bluff is called.
• Know when to enlist outside help, e.g. from a solicitor or other expert.
• Never admit in correspondence that you were or may be in breach of contract unless you do this in a letter clearly headed ‘WITHOUT PREJUDICE.’ If you do not do this, the other contract party may be able to use your admission against you in Court proceedings which may weaken your case.
• Keep clear notes of telephone discussions and copies of letters.
• Always respond to letters and telephone calls promptly, and if you have set a deadline, always make sure you follow it up without delay.
• When you reach agreement, make sure this is written down and signed by both parties as an amendment to the Agreement, or in other cases as an exchange of letters. Such a letter should begin “I refer to our earlier discussions about the contract set out below and the amended terms we have agreed. If you are happy that these reflect what we have agreed, please sign, and return the enclosed spare copy of this letter.”
• In a case where there have been money claims or claims of breach of contract or threats of legal proceedings; you should make it clear in the settling agreement/letter that the new arrangements have been accepted by both parties, in full and final settlement, of any claims by either party to date. This will ensure that neither party can try to resurrect an old claim later.
• In cases where both parties have agreed that the contract will be brought to an end, appropriate wording might be: “As discussed, we have agreed that the contract be ended by mutual consent with neither party having a claim against the other,” because an attempt at compromise or renegotiation might fail, you may find yourself going to court.
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