Breach of contract: How to dispute a contract

Lodders Solicitors answers some frequently asked questions about breach of contracts, how disputes can arise, and how to resolve them.

Commercial contract disputes and breach of contract claims can be serious and have a damaging effect on your business. Lodders’ expert team of commercial dispute solicitors can help to mitigate and resolve your contract dispute.

Whether you are bringing or defending a claim, we can help you to a successful resolution.

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What is a contract dispute?

Commercial contractual disputes occur when a disagreement between one or more parties takes place over a contract or agreement. Common types of contract disputes are breach of contracts, services disagreements, partnership disagreements, shareholder issues, and intellectual property.

Avoiding a breach of contract dispute

To limit your chances of a breach of contract dispute, you must make sure the contract is clear and legally binding. Always consult a solicitor when writing, reading, or signing a contract.

How to resolve a breach of contract

There are two main ways contract disputes are resolved.

Mediation: Mediation is a process used to settle disputes in a diverse, extensive range of situations. The mediator is a facilitator, not a judge, and therefore does not take sides. Mediation is a structured, interactive process whereby an individual, such as a solicitor or adviser, who is impartial and neutral, helps the parties involved to reach a mutually satisfactory settlement. The process is informal, flexible, voluntary, and confidential. Mediation involves limited costs and is very speedy, with high success rates.

Litigation: Litigation is the process of taking a disagreement to a court of law.

Starting a breach of contract claim

To start a claim for breach of contract, we will need to prove:

1. That you had a contract
2. That the terms within the contract have been breached
3. That the breach caused you to suffer a loss

What is the outcome of a breach of contract dispute?

In most contract disputes where mediation is pursued, a resolution will occur in the form of a signed agreement, known as a ‘settlement agreement’. If a settlement agreement is reached, then it will be a legally binding, written contract.

For those contract disputes that do not reach an agreement through mediation, it may be useful to take a break before resuming mediation.

Alternatively, where mediation cannot result in an agreement being formed and the contractual dispute is not resolved, litigation can be pursued. In other words, mediation, where unsuccessful, will not prevent you from taking your case to court upon failing to reach a satisfactory mediation outcome.

During litigation proceedings, the court will be presented with evidence and arguments from both parties, which will then lead to a judgement. Depending on the circumstances of the case and the judgement made by the court, you may be entitled to damages – money to help cover the costs of your contractual dispute – if you win your case. Court rulings are legally binding, but the losing party may have the right to appeal the decision in a higher court.

Why do you need a lawyer for a settlement agreement?

A dispute resolution solicitor will ensure you understand what the terms of the settlement agreement mean and how they will affect you, and that you obtain the most favourable outcome. A lawyer will also ensure the document is drafted so as to protect your interests and, in so far as is possible, remove any restrictions on your future conduct.

In our experience, the production of a settlement agreement is often the start of the negotiation and not the end. After all, a party’s first offer is rarely its best offer!

Examples of recent contract disputes we’ve advised on:

• Advising parties in a complex multi-million-pound claim against a foreign organisation for damages arising out of a Supply of Goods and Services Agreement.
• Acting for a party in a breach of contract claim for the supply of ceramic tiles, which was successfully settled prior to trial.
• Advising parties in a potential claim for shipping container overcharging by a third party.
• Acting for a party in the defence of a damages claim brought by a foreign concern in respect of the sale of intellectual property rights, including domain names.
• Advising a party in relation to a claim brought by a student alleging misrepresentation in respect of helicopter pilot training.
• Acting for a party in a breach of contract claim against the supplier of a defective laminating machine.
• Acting for a property owner against a builder and architect in respect of defective building and design work undertaken.

How Lodders can help you with your contract dispute and breach of contract claims

Our team has many years of experience in successfully resolving disputes across different business sectors, and we will work closely with you to reach a speedy and effective resolution, so as to limit the impact on your business.

We have four offices across the Midlands and South West, serving our clients nationally. Our offices are based in Stratford upon Avon, Cheltenham, Birmingham and Henley in Arden.