Q1: My business has been severely affected by a supplier’s failure to honour the contract terms we agreed. What can I do about it?
A: It is a fact of life that business disagreements occur, even in business relationships that have been formed over a length of time. Sometimes resolving the dispute is straightforward, sometimes it is more complex.
Knowing what you can do when things go wrong not only makes business sense, but can limit any disruption to your business caused by the dispute.
Litigation could be an answer, but litigation may not be the right first choice for your business, particularly if you want to continue with a business or personal relationship with the party with whom you have a dispute.
There may well be other options to litigation. Mediation or other forms of alternative dispute resolution for example, may be more appropriate to your particular circumstances.
On the other hand, the agreement to which you are a party, may specifically stipulate how disputes are to be resolved. If you think that a dispute is likely to arise, or it has already arisen, it could be prudent to have the contract examined before deciding on a course of action.
However you decide to act or if the contract stipulates the route you initially have to take, it is essential that you make informed decisions. At Libra Solicitors we believe in giving you clear, practical advice so you can do just that. For a confidential discussion about the issues that may be concerning you, call us on 01223 632420 and let’s see how we can help you.
Q2: Should I consider suggesting the implementation of a shareholder agreement in our business, even though it is effectively family run and owned?
A: Having a shareholders agreement in any situation where there is more than one shareholder in a business, we believe would be prudent. A well drafted agreement can help avoid disputes between the shareholders themselves, and also contain provisions which set out the process to resolve any dispute.
Shareholders agreements can address a number of key issues that may cause problems if they are not properly addressed. For example, voting rights and how they are allotted can quickly become a prickly issue when key decisions have to be made. The transfer of shares or conditions of sale in respect of the shares themselves is another issue that could become contentious. Dealing with the issues sooner rather than later in formal agreement could avoid costly disagreements at a later date.
Whether you want us to examine your current agreement to determine its capacity to protect your interests in a business, or require us to draft an agreement that will give you the structure and protection you need, we are confident that we can provide you with effective solutions. For a confidential discussion about the issues that may be concerning you, call us on 01223 632420 and arrange an appointment.
Q3: I have been sent a contract from a new supplier which I have not signed as I want negotiate better terms than they are offering. How can you help me?
A: Whatever the size of your business, negotiating contract terms with other businesses can be tough and there are pitfalls. You want to achieve the best possible advantage for your business, but at the same time you might not want to push too hard as you might want to create a reliable longer term relationship with the business you are negotiating with.
At Libra Solicitors, we believe that balanced negotiation could bring better long term benefits to your business and will allow you to maintain your existing business relationships and build new ones.
Whether you want to negotiate better contact terms for your business or re-negotiate contract terms that have already been agreed, our outcome focused approach could help your business achieve its objectives when dealing with other businesses.
For a confidential discussion about how we could help your business, call us now on 01223 63240 and arrange an appointment.
Q4: We are considering using mediation as a means of resolving a dispute. What are the pros and cons?
A: Mediation is a common type of alternative dispute resolution (ADR). Some of the potential benefits of engaging in mediation are as follows:
- The non-confrontational nature of mediation, and the involvement of both parties in finding a resolution to the dispute, can preserve a relationship between the parties.
- Mediation is a voluntary process which both parties have to agree to.
- The parties may have already agreed to mediate in the event of a dispute, for example contract provisions may have included a mediation clause.
- Failure to consider an offer to enter into mediation of a dispute (or some other form of ADR) may have cost consequences if the matter proceeds to litigation.
- Mediation is generally cheaper and quicker than litigation.
- The parties to a dispute can agree to mediation at any time, even if litigation has already begun.
- Mediation is confidential, so any information that is revealed during the process will not be available to the court if mediation is unsuccessful and the matter proceeds to litigation.
- The confidential nature of mediation can be important if the dispute involves trade secrets such as valuable intellectual property.
- The confidential nature of mediation means that both parties can avoid the negative publicity and reputational damage that might occur if the dispute leads to litigation.
- The parties can select a mediator who is experienced in the area of dispute, who can assist both parties in getting to the core issues in dispute.
- Mediation allows the parties to see the strengths and weaknesses of each other’s cases. This can encourage the parties to take a more pragmatic view on their chances of success in litigation and the desirability of reaching a settlement of the dispute.
- Each party gets to give their own version of events in a non-confrontational environment, with an emphasis on problem-solving rather than apportioning blame. This can encourage a common sense approach where the parties actively attempt to resolve the dispute in a way that is acceptable to both.
- The mediator can facilitate this understanding by drawing out the real issues of the dispute, and by helping the parties to understand what they would regard as an acceptable resolution of the matter. This can encourage some level of compromise.
- The parties retain control over any settlement of their dispute, which can allow them more creativity in finding an appropriate remedy for any damage done. For instance, in a contractual dispute the injured party might be given preferential terms of business with the other party, whereas the remedy options available to the court are more limited.
- The mediator does not have the final say in whether the dispute is to be resolved. It is for the parties to come to an agreement. If they do not, then both parties may walk away.
However, mediation may not always be suitable. The following are examples of situations where it may not be advisable to engage in mediation:
- One or both of the parties may be completely unwilling to cooperate or compromise.
- If mediation appears unlikely to succeed, it may not save the parties time and money.
- The parties may be waiting for crucial expert evidence. For instance, a report that will determine liability without which any attempt to mediate may be premature.
- A complex matter of law may need to be ruled on in order for the dispute to be settled.
- There may be an urgent need to initiate litigation, such as in cases were an emergency injunction is the primary remedy that is being sought.
- One of the parties may be eager for public disclosure of the facts of the dispute.
- One of the parties may feel their case is so strong that they can apply for a summary judgement.
- One of the parties might have doubts about whether the mediation agreement can be enforced.
For a confidential discussion about mediation or other forms of alternative dispute resolution and how we could help your business, call us on 01223 632420 and arrange an appointment.