Contract Dispute Resolution

contract dispute resolution

What is a contract dispute?

A contract dispute refers to a disagreement or conflict between two or more parties regarding the terms of a commercial or business contract.

Contract disputes can arise for various reasons, and business owners are likely to experience some form of dispute at some point during their business journey. Legally binding contracts can be both explicit and implied and either verbal or written.

Some of the more common reasons that contract disputes arise include:

  • Breach of contract: When one party fails to fulfil their obligations as outlined in the contract.
  • Misrepresentation: When a party provides false or misleading information during contract negotiations.
  • Non-performance: When a party fails to perform as promised under the terms of the contract.
  • Disagreements over contract terms: Parties may interpret specific clauses or terms differently, leading to disputes.
  • Force majeure events: Unforeseen circumstances, such as natural disasters or government actions, may prevent parties from fulfilling their obligations under the contract.

Contract dispute resolution methods are available, and parties can come to some form of amicable agreement regarding their disagreement if they so wish.

Our team of commercial contract dispute resolution solicitors at South Bank Legal are highly experienced in assisting clients with contract dispute resolution methods and processes, and we work tirelessly to ensure favourable outcomes for our clients.

If you have entered into a contract and are now facing a dispute and would like some specialist legal advice, then please do not hesitate to get in touch with us today to discuss your case.

Types of contract breaches

Broadly speaking, contract breaches can be categorised into two main types: actual breaches and anticipatory breaches. Additionally, breaches can be further classified based on their severity as material or minor.

Actual Breaches:

These occur when a party fails to fulfil their contractual obligations by the agreed-upon deadline or altogether. Some examples include:

  • Failing to deliver goods or services: This could involve not delivering the specified goods at all, delivering them late, or delivering faulty or defective goods.
  • Failing to pay for goods or services: This includes not paying the agreed-upon amount, paying late, or refusing to pay altogether.
  • Failing to meet other contractual obligations: This can encompass various aspects like not maintaining confidentiality or violating exclusivity clauses.

Anticipatory Breaches:

These occur when a party clearly communicates their intention not to fulfil their contractual obligations. This can be through verbal or written communication, and it gives the other party the right to terminate the contract or take other legal action.

Material vs. Non-Material Breaches:


  • Material breaches: These are significant breaches that deprive the other party of the core benefit they expected from the contract. This allows the innocent party to terminate the contract and potentially seek damages.
  • Non-Material breaches: These are less significant breaches that do not as significantly impact the other party’s benefit under the contract. While they still constitute grounds for legal action, they might not be grounds for immediate termination or significant damages.
  • Fundamental Breach: Another way of describing a material breach; ie. when one party’s failure to perform is so significant that it deprives the other party of the main benefit they expected from the contract. A fundamental breach typically entitles the non-breaching party to terminate the contract and claim damages.

Resolving a contract dispute

There are various resolution methods available to address contract disputes and breach of contract. The type of remedy will depend on the specific circumstances of the case, the willingness of the parties involved, the nature of the breach or dispute and the severity of losses resulting from the dispute.

It is also worth noting that some forms of contract dispute resolution methods are more suitable for parties who wish to maintain a productive business relationship despite the disagreement, such as negotiation and Alternative Dispute Resolution (ADR).

Some of the most common methods to resolve contract disputes include:

  • Negotiation: This is often the first attempt at resolving a dispute. It involves direct communication between the parties involved to reach a mutually agreeable solution. This can be facilitated by a neutral third party if necessary. Negotiation is generally cost-effective and quicker compared to other methods but requires both parties to be willing to compromise and communicate effectively.
  • Mediation: This is a form of Alternative Dispute Resolution (ADR) where a neutral third-party mediator guides the discussion between the parties to help them reach a settlement. The mediator facilitates communication and doesn’t impose a solution, focusing on helping the parties find common ground. Mediation is often faster and less expensive than litigation and can help preserve relationships between the parties involved.
  • Arbitration: Another form of ADR, arbitration involves a neutral third-party arbitrator who makes a binding decision on the dispute after hearing arguments from both sides. Unlike mediation, the arbitrator imposes a solution that both parties must comply with. While arbitration can be quicker and less formal than court proceedings, it generally comes with higher costs compared to mediation.
  • Litigation: This is the formal process of resolving a contractual dispute through the court system. It involves presenting evidence and arguments before a judge who issues a final ruling. The court can rule on damages owed to the party who has suffered as a result of the breach of contract, but the court can also order the breaching party to fulfil their contractual obligations through an order for specific performance, or restrain a party from committing further breaches through an injunction. Specific performance order are typically made when awarding damages alone would not be sufficient to address the breach. Litigation can be time-consuming, expensive, and adversarial, and the outcome is entirely in the judge’s hands. It’s often considered a last resort after other methods have been exhausted.
  • Expert Determination: In some cases, the contracting parties may agree to submit the dispute to an independent expert for determination and final decision. The expert evaluates the evidence and issues a decision based on their expertise in the subject matter of the dispute. Expert determination can be a quicker and less formal alternative to arbitration or litigation.

It is worth noting that parties entering into an agreement can ensure a contract dispute resolution clause is added to the initial contract to ensure that all parties are aware of the procedure to be taken in the case of any dispute or breach arising. This can make the dispute process run much smoother, and parties can typically come to an amicable agreement much faster with less fall-out.

How can South Bank Legal assist?

South Bank Legal are a leading team of commercial solicitors in England and Wales. Our legal professionals are highly experienced and can provide expert advice on contract dispute resolution methods.

Our solicitors can provide specialist legal services on a wide range of commercial disputes issues. These include intellectual property disputes, multi-million-pound shareholder disputes, drafting contracts and property disputes.

If you would like more legal advice on contract dispute resolution or wish to discuss any of our services, you can contact us using the form below or telephone 02035765179 for a confidential discussion with one of our solicitors.

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