Jagdeep Singh Hayre, a partner at BLM specialising in commercial litigation, explains how tennis clubs and businesses can minimise the impact of contract disputes.
Read your contract… if you have one!
We all buy things every day but few of us give any thought to what may go wrong. That should be the first thing you think about. Careful planning is the first line of defence. If you get that wrong, the manner in which the contract is entered into can still make a difference.
The contract – oral or written?
Sometime the transaction is informal following brief conversations. At other times you may have detailed negotiations but seal the deal with a handshake, or you may rely on a carefully and technically worded contract. Each can have their pitfalls.
Enforceability of the terms
Whether a contract is verbal or written it can be enforceable, but a verbal agreement is fraught with difficultly. There may be a dispute about what was agreed and often there is little evidence to substantiate one person’s view over another. What people believe may depend on susceptible memories, interpretation or ravages of age and time, however reasonable the belief.
Also not everything said forms part of the contract. Representations could be made in negotiations but are not intended to be part of the bargain. The distinction is important.
Written contracts
A written contract ought to provide you certainty and clarity. It avoids misunderstandings. It can be enough to stop a dispute escalating. It’s far easier to show someone a contract and point out what you’re entitled to than tussle over what was agreed.
Even when contracts are in writing, people still don’t read them or don’t really understand what they are letting themselves in for. Does that matter? Without a doubt, it does! Whether you read or understood the terms you will be bound by them unless you can prove fraud. There is always the small print – the smaller, the more attention it deserves.
Written contracts can also contain hidden pitfalls that can cause difficulties that you might not appreciate. Pay attention to hard to grapple with clauses that may be at the back of a lengthy document and which might seem unimportant – after all what’s going to go wrong – right?
Implied terms
Terms can also be implied, such as terms in common usage or customary within a specific industry (even though it isn’t known to you), or where perhaps there has been a previous course of dealing, or to give a contract business sense.
Evidence of the agreed terms and conditions
Above all make sure you record events in writing. Confirm conversations and telephone discussions after the event by letter, keep minutes, ask the other party to confirm agreement or amend the minute if it doesn’t accurately reflect what was agreed. If there is some uncertainty seek written clarification.
Dispute resolution
Even written contracts can be fraught with difficulty. Sometimes people will argue the contract should be rectified because, for instance, it does not reflect the terms agreed, or what was intended; or there may be ambiguities. The more unwieldy a contract the more problems can arise.
When a dispute arises it may be necessary to evaluate whether a term may be implied as it can affect the outcome.
Above all (it may be obvious but people still don’t do it) keep details and relevant documents for so long as they may be required in the event of a dispute arising. Many a case has been lost due to difficulty in evidencing one’s position. There is no more cogent evidence than contemporaneous documents that tell a story.
Often how a dispute is handled at the early stages can make all the difference. Act early and decisively to nip a problem in the bud before it escalates. You should get early advice to help you manage the situation and hopefully salvage business relationships, which can be equally important considerations, before becoming entrenched in warfare.
BLM was voted Insurance Law Firm of the Year at the Claims Awards 2014 and is the preferred legal partner of the Tennis Industry Association. To find out more, visit www.blmlaw.com or email amanda.watson@blmlaw.com.