Terminating Your Contract When Terms Are In Question

Terminating Your Contract When Terms Are In Question

This question is asked time and time again as it is often the case that two parties will simply enter in to a verbal arrangement with nothing more than a few emails here and there perhaps covering ‘commercials’ with very little (if any) agreement in respect of the ‘legals’ including e.g. how much notice must be served to exit/ terminate the contract (if any). The main aim may be to get the work in and the job done!

Purely for illustrative purposes, an example is where a client business agrees in principle that it will enter a 12 month project for e.g. the delivery of SEO Services at a monthly fee of £X. It then materialises that just six months in, the paying client is no longer happy with the services being provided and refuses to pay any more monthly payments at which point the SEO service provider may turn round and state that there is no possibility of getting out of the ’12 month fixed term’ contract and that the client business is liable for the remainder of the term. Of course, in the absence of any written documentation stating that the agreement was for a fixed term, it ends up being a ‘their word against ours’ scenario.

It is advisable that not only should there be written documentation in respect of this matter so that parties are clear on their respective obligations and liabilities, a supplier should ensure that this information is indeed brought to the attention of the client prior to commencing the services and agreed upon in writing. However, the courts will expect a business client to be equally as savvy and inquisitive  enough to request this info itself, so it is not just up to the supplier (as would be more the case in a business-to-consumer situation).

In the example above, although there may be no terms and conditions as such in existence, nevertheless, the courts would tend to look at the behaviour of the parties and are quite reluctant to find that there is no contract where the parties have in fact been operating on the basis that there is one, particularly where the characteristics of a contract have been met (for example, services have been provided and paid for).  Unfortunately no matter is going to be necessarily clear cut and will depend largely on the facts and it is not something that can be answered in the abstract or as a matter of principle.

If it could be determined that there is essentially a contract in place by virtue of the actions of the parties and any existing correspondence (even by way of emails) pointing to the basis upon which the parties agreed to contract, such factors will be key. A supplier’s terms and conditions may in fact be merely referenced on an invoice by way of a URL. If this is subsequently discovered, the notice period for termination may be indicated therein and shall in most cases be valid. However, if the position if not so client-friendly, it may then be a case of asking the supplier to prove that such standard terms have not changed since the services first commenced!

Anyway, 14 months later of legal wranglings, first by email and then by small claims, raised lanxiety (anxiety based around legals!) and wasted time, it is clear that half a day spent getting an SEO Services Agreement in place would have been the key in hindsight!

 

By | 2017-05-25T14:38:48+00:00 December 23rd, 2016|News|0 Comments