Varying Commercial Contracts: 4 bad mistakes, then 2 more
Posted on 25th September 2023 at 16:44
Recently we acted for restaurant owner clients who had felt uneasy at the renewal terms for their hygiene equipment leasing contract. Some in their position may have reluctantly chosen to lump it, and “put it against tax”, in which case a rogue supplier would have got away with sharp practice once more. Our clients were of a different mind, and had ended up with a county court claim form on their doorstep as a result of deciding to defy the supplier’s threats.
What we discovered, and took up firmly with the supplier, involved: -
A unilateral price rise, where there was no power to impose one;
Imposition of a new five year term, without authority;
Falsely obtaining a signature for the renewal terms by giving the impression that the clients were only signing for the stocktake;
Failure to leave behind a copy of the purported new equipment lease.
Quite a charge sheet. Four avoidable bad mistakes. At first sight, breach of contract, misrepresentation, no meeting of minds, and withholding evidence. Indeed, to describe them as “mistakes” may have been generous. Especially when the unilateral price rise could be treated as repudiating the original contract, entitling our clients to terminate it with immediate effect.
We explained that this was exactly what our clients had decided. The supplier blustered about cancellation terms and the need to pay the contract up in full. It made a further mistake by heading its letter “Without Prejudice” despite having not made an offer of an off the record nature aimed at settling a dispute. The number of times we have seen that one…
Having filed the Defence, we sat back and waited to hear from the court. To everyone’s pleasant surprise, we soon found out that the supplier had evidently had a change of mind and discontinued its claim. No courage of convictions either to defend its sharp practices or tackle the trial timetable. Unilateral discontinuance was a final mistake – had it written to propose a “drop hands, walk away” settlement, the clients would have gratefully accepted. Now it was on the hook for our clients’ costs.
Our clients reaped the benefit of timely advice on the merits of standing up to wrongful pressure. The supplier could have reaped similar benefit if it had taken advice on the prospects of winning that claim, or indeed on whether its contract renewal practices were sound and sensible. Even if most customers would be none the wiser, some might express their dissatisfaction via online criticism of the supplier’s reputation. Or indeed stand firm and inflict a costly defeat.
Do you have a contract dispute on your hands? Or terms and conditions in need of a review? Get in touch. Contact David Cooper on 0121 325 5402 or via dmc@coxcooper.co.uk .
Tagged as: breach of contract, contract dispute, contract renewal, discontinuance, misrepresentation, terms and conditions, without prejudice
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