How Terms of Business can help avoid contract disputes – a case study

Commercial contract disputes can be difficult for all involved. As well as potentially leading to financial loss, they often cause delays, reputational damage and stress, particularly where relationships have broken down. When agreements are informal or unclear, disputes can become even more complex, with each party holding a different interpretation of what was agreed.

One of the most effective ways to prevent these problems is to have clear, professionally drafted ‘Terms of Business’ in place. To demonstrate this, we’re sharing the story of one of our clients – name changed for confidentiality – who came to us after facing serious complications due to the absence of a written contract.

The situation

Our client, Shuri, is a local artist who had entered into an informal agreement with a business to manufacture and supply her artwork. Unfortunately, installation and safety concerns meant the artwork could not be delivered as planned. Shuri was left with wasted costs for materials, uncertainty around liability, and concerns about the potential misuse of her intellectual property. All arrangements had been discussed verbally or over email, meaning there was nothing in writing to confirm the scope of work, allocate risk or clarify the ownership and permitted use of the artist’s designs.

The value of written terms

From a legal perspective, professionally drafted Terms of Business serve several key functions. They set out the rights and responsibilities of each party, clarify payment terms and timelines, define what happens in the event of cancellation or delay, and protect the ownership of intellectual property. Crucially, they help to establish whether a contract exists and provide a reference point for resolving any disagreements that arise.

In Shuri’s case, the lack of documentation made it challenging to determine whether a binding contract had been formed, who was responsible for the costs incurred, and what rights each party held in relation to the completed and unfinished work.

The value of engaging a solicitor in contract disputes

Engaging a solicitor in a contract dispute brings not only legal expertise but also a calm, impartial perspective to what are often emotionally charged situations. Where two parties may struggle to separate the personal from the practical, we can step in with a sensitive, professional and intelligent approach, often making it possible to resolve disputes more efficiently and with less conflict than if the parties attempted to negotiate alone.

How we helped

Our Dispute Resolution Team stepped in to negotiate a fair and pragmatic outcome. Through careful handling of the dispute, we secured an amicable resolution between both parties. Importantly, we also ensured the client’s artwork and associated rights were protected within the final settlement.

The lesson

Every business – no matter its size – deserves to be protected. Contracts aren’t just a formality, they are a crucial safeguard that can prevent misunderstandings, protect creative and commercial assets, and provide a clear route to resolution should problems arise.

Planning ahead

By speaking to our Corporate Commercial Team at the outset, clients can put in place comprehensive Terms of Business that reflect the nature of their work and protect key interests such as intellectual property, delivery timelines, and liability for costs. The team can help draft new terms or review existing agreements to ensure they offer adequate protection and remain fit for purpose as the business evolves.

When disputes arise

If clients believe a contract has been breached, or if they have not received the product or service they expected, our Dispute Resolution Team is here to help. They can provide practical advice and work towards reaching a fair resolution, aiming to reduce stress and increase clarity around any legal claim.

Having the right legal support can help avoid costly disputes

Business owners often only think about legal protections after something has gone wrong. But putting robust Terms of Business in place can save time, money and unnecessary stress in the future. Whether you’re just starting out or have been trading for years, it’s essential to have agreements that protect your work, clarify responsibilities and reduce the risk of disagreements.

If you’d like help drafting new terms, reviewing existing contracts or resolving a commercial disagreement, Attwaters is here to support you. Please get in touch with our corporate commercial specialists today.