Commercial Contract Disputes: Getting the Right Advice
Commercial contracts are the basis of doing business. Much of the law covering the sale of goods, agency, negotiable instruments, insurance, partnerships and franchise licenses is based in the law of contract. Those engaged in doing business in Australia are making agreements and contracts with others on a daily basis. But what happens when those you make a contract with don’t do what they agreed? That is when the right kind of legal advice and prompt action is crucial. This article will seek to give an overview of what steps you and your solicitor can take when you find yourself with a non-performing contractual partner.
The Right Advice
Business people know that the breaking or non-performance of a commercial contract will have long-term financial and organisational effects. As commerce takes place within a web of relationships the breakdown of one or more of these will make it hard to meet your strategic business goals. The first step is to get the right advice from Solicitors who have attention to detail and understand the many needs of business clients.
When meeting with your legal adviser the following will take place:
- Instructions
Be ready to give your solicitor all the information they need to begin gaining a resolution to your contractual dispute. While being involved in a dispute is frustrating, it is important to give full and accurate details to your solicitor regarding negotiations, identities of the other parties involved, and of the contractual breach or non-performance itself. The financial and legal status of the other party will be important to your solicitor.
- Documentation
Your solicitor will also need to get any documentation from you regarding the agreement that is in dispute. These may be faxes, e-mails, letters, invoices, bills of sale or any other documentation. These will be most important for your solicitor to begin to build a case and advise you.
After having received this information your solicitor can begin to advise you on what the best steps are in resolving the dispute, both from legal and business perspectives.
Dispute Resolution
Resolving the dispute before involving the court system is highly desirable from both monetary and time perspectives. If appropriate your solicitor may seek to try and resolve the dispute with a letter of demand to the party in question. This letter will usually set out the prospects of litigation against them and encourage them to perform their side of contract so that court action can be avoided.
Often the other party will respond with an offer to resolve the dispute such as part payment of a debt. Any negotiations that take place will be on what is called a ‘without prejudice’ basis and the negotiations that take place will not have a bearing on any court action that follows if they break down.
The negotiations may require a certain amount of compromise on both sides and your solicitor will only negotiate based on your best interests.
Going to Court
Only when these attempts at dispute resolution fail will going to court become necessary. Working with a firm that is experienced in court appearances is essential at this point to make sure your claim is dealt with in the most efficient and professional manner possible. These will be some of the steps that your solicitor will make when escalating your claim:
- Statement of Claim
First of all your solicitor will lodge a statement of claim that will set out your case. The other party will have a chance to respond to these claims.
- Compromise
After the statement of claim has been lodged there will be a chance for compromise to take place. If there is an acceptance of a compromise at this point a trial can still be avoided.
- Arbitration
In your case arbitration may be available. This is a different form of hearing to a hearing by a judge and could be a quicker and cheaper way of coming to a resolution. If you disagree with the resolution by the arbitrator, and the award was for more than $3000, your solicitor will apply for a full hearing in the Court.
- Full Hearing
Hearings can be short matters or can become lengthy and difficult to understand. Sometimes the other party will choose not to lodge a defence to your claims and at other times they may dispute your facts in the hearing. Your solicitor will make sure you are informed the whole time.
Going to court and working through the steps of resolving your contractual dispute can be frustrating and stressful. However, if you have a solicitor experienced in commercial court appearances you can be sure you will be totally informed and will have the best prospects of getting the result you need to continue doing business.
Conclusion
Commercial contract disputes can take on a variety of forms from small debt recovery actions in the District Court to large trade practices litigation in the High Court. Heckenberg Associates understand that no matter at what level your dispute is at the outcome will be important to your business future. By understanding both the needs of commercial clients and the intricacies of commercial contracts and court appearances you can be assured that you will be in safe hands.
