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DISPUTE RESOLUTION: Contract Disputes

Contract disputes can involve many aspects of commercial relationships ranging from small building contracts through to major equipment supply, maintenance and service transactions, sometimes involving several parties.

In theory, the use of written contracts should result in less opportunity for argument. In practice the wriggle room is ever present. Some of the more difficult issues in which we get involved are where, after initial negotiations to agree a written contract, the parties give up in despair and just get on with the job. When relationships then break down, is there any contract at all and if so, what are its terms? Can either party claim for payment or any compensation if the work grinds to a halt?

Quite often we deal with misrepresentation. One party argues that they were induced to enter into a contract as a result of false representations made by the other such as to the profitability of a particular business. Can the innocent party treat the contract as repudiated or are damages the only remedy? If so, how are damages going to be computed? What evidence is going to be required?

Establishing the factual basis for liability under contract and the losses that may be claimed often prove to be the most difficult part of our work. It is a matter of real concern to clients when they discover that the law will simply not allow them to recover for each and every loss they have sustained through another party’s breach.

The evaluation of what a claim may be worth has to go hand in hand with an assessment of the likely legal costs in representing the client and the exposure to costs that the client will face in the event of losing a case. The costs and risks of litigation are two of the most important components of our advice. More frequently than ever before we strive to negotiate settlement of claims whether directly or through third party mediation.