Nath Solicitors is a law firm based in Mayfair, London that advises and represents businesses, directors and individuals in commercial contract disputes in England and Wales. We have extensive experience in conducting High Court litigation and cross-border, international disputes. Nath Solicitors is led by Shubha Nath, a solicitor with more than 30 years’ experience in complex and high-value contractual disputes.
We act for clients in disputes over commercial agency, franchise, distribution, supply and services, and joint venture agreements. We act for both claimants and defendants, and we advise on breach of contract, wrongful termination, repudiation and contractual interpretation.
What is a commercial contract dispute?
A commercial contract dispute is a disagreement between businesses or individuals regarding the rights and obligations in a contract between the parties. Such disputes usually arise when one of the parties have breached the contract through non-performance, incorrect termination, or incorrect interpretation of the terms (or is accused of doing so).
The causes of these disputes vary, but the most commonly seen factors from our past cases are as follows:
- Ambiguous terms and wording in clauses regarding performance that may be misinterpreted
- Breach of performance: where a party fails to deliver or delivers substandard quality goods and services compared to what was required in the contract.
- Reliance on undocumented verbal agreements instead of a written agreement signed by all parties.
What commercial contract disputes does Nath Solicitors handle?
- Commercial agency disputes. We act for commercial agents and principals in disputes over termination, notice, unpaid commission and compensation. The Commercial Agents (Council Directive) Regulations 1993 set minimum notice periods (Regulation 15) and give agents a right to compensation or an indemnity when the agency ends (Regulation 17). An agent must notify the principal of a claim within one year of termination.
- Franchise disputes. We act for franchisors and franchisees in disputes over breach of the franchise agreement, termination, fees, restrictive covenants and post-termination obligations.
- Distribution agreement disputes. We advise on exclusive and non-exclusive distribution arrangements, including territorial rights, minimum purchase obligations, supply failures and early termination.
- Supply of goods and services disputes. We handle claims for non-delivery, non-payment, defective goods, poor performance and delay. Terms implied by the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982 are often central to these claims.
- Joint venture and business collaboration disputes. We advise on disagreements arising from joint ventures, commercial partnerships and other contractual business arrangements.
- Breach of contract claims. We bring and defend claims where a party has failed to perform its obligations or has refused to honour a binding agreement.
- Termination and repudiation disputes. We advise where a party tries to end a contract early, refuses to perform or indicates it will no longer be bound.
- Contractual interpretation disputes. We advise on the meaning and effect of disputed clauses. English courts interpret commercial contracts objectively, reading the words in their documentary and commercial context, as the Supreme Court confirmed in Arnold v Britton [2015] UKSC 36 and Wood v Capita Insurance Services [2017] UKSC 24.
Can a business walk away from a contract before it ends?
Not necessarily. A party can only end a contract early if the contract allows it, or if the other party has committed a repudiatory breach. Wanting to leave a contract is not, by itself, a legal right to terminate it.
This is one of the most common situations we see that cause damage and losses to businesses. The obligations on the parties may not have been fulfilled, but during the course of the contract one of the parties may threaten to terminate it, cease performance or try to impose new or varied terms.
A wrongful attempt to terminate can itself be a repudiatory breach. In such cases, the innocent party usually has two main choices:
- To affirm the contract and hold the other party/parties accountable; or
- Accept the repudiatory breach, bring the contract to an end and claim damages from the other party/parties.
Your business may experience lasting consequences depending on how you respond to these situations.
What should you do if the other party threatens to terminate or renegotiate?
Take legal advice before you respond. Early correspondence often shapes and defines the nature of the entire dispute. It would be helpful to keep in mind the following:
- Do not agree to new terms, sign variations or accept termination until you understand your legal position.
- Examine the termination, notice and dispute resolution clauses, any deadlines they may impose and how it may affect your next steps.
- Preserve the contract, email correspondence, messages, invoices and performance records between the parties.
- Prepare a short chronology of the key events and dates.
- Avoid issuing informal threats or admissions in writing.
In such situations where pressure mounts, Nath Solicitors can review the agreements, assess the validity of the termination or alleged breach, and advise on the most robust approach from Pre-Action Correspondence before legal proceedings or conducting the course of litigation.
What remedies are available for breach of a commercial contract?
In commercial disputes, damages is the most common remedy sought after, with the aim of putting the innocent party in the position it would have been in had the contract been performed properly. Depending on the facts, other remedies may include:
- a debt claim for the amounts owed under the contract
- an injunction, including urgent interim relief to stop a threatened breach
- specific performance, in limited cases where damages are not adequate
- a declaration from the court on the meaning of the contract or whether termination was valid
- compensation or an indemnity for commercial agents under the 1993 Regulations
One should be mindful of the time limits that apply: a claim for breach of an ordinary contract must generally be brought within six years of the breach, and within twelve years for a contract made by deed under the Limitation Act 1980, sections 5 and 8.
Do commercial contract disputes always end in court action?
No; litigation is not necessary under all circumstances. Many disputes can be resolved in early stages through the parties’ engagement in negotiation or mediation, which may be faster and more cost-efficient than litigation.
Consider the following questions to determine the best approach:
- The intended outcome: considerations such as whether the parties intend to continue an amicable business relationship should be accounted for.
- The terms regarding dispute resolution within the contract: for example, if the contract contains an arbitration clause, arbitration will normally the proper forum for dispute resolution.
- The urgency of the matter: court proceedings become necessary in cases where the other side refuses to engage constructively, or if there is an immediate threat to your business arising from the breach. When it is impossible to correspond with the other party in to move matters forward, the need for urgent protective relief or the enforcement of the rights by the power of the court may be required to safeguard your legal rights in the contract.
It should be noted that the courts of England and Wales expect parties to consider alternative dispute resolution and may sometimes order them to engage in it (for example in the case of Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416). However, where a dispute cannot be resolved through alternative dispute resolution, we can assist in commencing legal proceedings in the High Court or defending you against the other party’s legal proceedings against you.
How Nath Solicitors can help
- Reviewing and considering complex commercial contracts
- Advising on rights, obligations and alleged breaches under commercial contracts
- Challenging wrongful or premature termination of contracts
- Pursuing damages and other financial losses arising from breach of contract
- Defending businesses against contractual claims
- Handling agency, franchise and distribution disputes
- Negotiating settlements and representing clients in mediation, including drafting and reviewing settlement agreements and liaising with the other side
- Bringing or defending legal proceedings in the High Court
What are the timeframes of a commercial contract dispute?
There is no singular, definitive answer to this. Some disputes can be settled within weeks after issuing robust pre-Action correspondence; some other cases require proceedings to be issued.
Nath Solicitors can review the information on your matter and try to provide an estimated timeframe. However, one should be mindful of arbitrary factors and circumstances that may affect the time taken to settle these disputes.
Contact Nath Solicitors about a commercial contract dispute
If a party that you are engaged with commercially is threatening to breach an agreement, refusing to perform their contractual obligations or is trying to terminate the contract prematurely, immediately seek legal advice to ascertain any enforceable rights and remedies you are entitled to under the agreement. When gathering information, start with a concise summary of the events with key facts and dates, followed by the main businesses and parties involved, the outcome you wish to achieve and main documentation such as the contract and correspondence between the parties.
Any urgent deadlines imposed by the court or in the contract, or any immediate threat of loss or harm to your business should be brought to our attention at the beginning so we may act promptly and tailor our strategies to avoid or minimise any damage caused to the business.
Nath Solicitors understands the urgency of such matters and aims to respond and act promptly. We aim to respond within the same day or next working day during office hours subject to capacity.