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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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My company (a ltd one say A) has been supplying another company

Resolved Question:

My company (a ltd one say A) has been supplying another company (a ltd one say B) for the past 10 year with a product that I (A) obtains from a manufacturer (say C). B agreed with A 10 years ago that A would supply the products. This agreement was by a handshake.
B has recently done a deal with C and pushed me out of the frame!
This is not a big business but B is the main customer of A.
What remedies do In have?
Thankyou
Submitted: 1 year ago.
Category: Law
Expert:  Ash replied 1 year ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this.

Alex Watts :

For now please let me know whether you have any contract in writing with C or between you and B?

Alex Watts :

I see you say there is a handshake, but not sure who that is in between.

Customer:

The handshake was with a person acting on behalf of B

Customer:

Can you confirm that I will only pay £56 for this info

Alex Watts :

Yes it is a one off fee.

Alex Watts :

What contract, do you have with C, if any?

Customer:

A has been doing business with C for a considerable time - C is awarev of whom B is

Alex Watts :

Ok. but is there any contract between you and C?

Customer:

A does not have anything written down, A and C have spoken a number of times in which A has said to C that B is A's customer

Alex Watts :

Ok thanks. Its bad news then I am afraid to say.

Alex Watts :

If there is no contract between you and C and no contract save for a handshake between you and B then this is a problem.

Alex Watts :

If it was never discussed that C would contact B or B would contact C then sadly you can not stop them.

Alex Watts :

There is no contract preventing contact and therefore nothing in writing which makes it harder

Alex Watts :

Therefore there was nothing stopping B contacting C or C contacting B.

Alex Watts :

Sadly there is nothing you can do because there was simply no contract in writing and nothing to prevent B and C talking.

Alex Watts :

If there had been a contract preventing B doing a deal with C or C with B then you could seek an injunction.

Alex Watts :

But in the absence of that you can't stop them talking.

Alex Watts :

I am very sorry if this is not the answer you want and certainly not the one I want to give you, but I have a duty to be honest

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

If C asked me to procure products why is that not a contract - both A and c have been acting as though there is a contract in place

Alex Watts :

Yes it is a contract.

Alex Watts :

But that does NOT stop C going to B

Alex Watts :

Unless it was a term of the contract.

Alex Watts :

If you asked C to procure contracts, that does not stop C doing anything else.

Alex Watts :

Your contract was to procure products, that was it.

Alex Watts :

There is nothing stopping C going to B unless that was specifically agreed to discussed

Customer:

It is also the same with B, both A and B have been acting as though there is a contract in place ie the deal will be done between a and b and A and c.

Alex Watts :

Sadly yes. Unless it was agreed or discussed no contact, you can't stop it

Alex Watts :

It needs to be a term of the contract

Alex Watts :

I am sorry

Alex Watts :

I wish it was better news but there is simply nothing discussed or agreed that prevents contact between the parties.

Customer:

I am not suggesting that C cannot talk to B, or B talk to C but in the event that that has happened B has broken the contract with A that stated that A would supply these products to B

Alex Watts :

But it was not a term of the contract that prevented contact or to supply B. Therefore if it is not a term, you can't enforce it as there has been no breach.

Alex Watts :

If it was a term that C could not talk to B or supply products direct then you would be fine.

Alex Watts :

But from what you have said, sadly it is not.

Alex Watts :

Therefore if you took it to Court, you would need to seek an injunction. A Judge would ask on what basis are you seeking the injunction.

Alex Watts :

You can't say its because of a written contract, because there is not one.

Alex Watts :

You can't say because it was agreed C would not talk to or supply B because that was not agreed

Alex Watts :

I am very sorry, but this is why a written contract needs to be in place, to protect your position.

Alex Watts :

As there is no written contract sadly there is no term that has been breached that you can take action on.

Alex Watts :

I am very sorry

Customer:

But if at the time of the handshake there was no doubt that B would always obtain the goods through A what then?

Customer:

And if at the time of the deal with C then a stated that no contact would be allowed by A what then?

Alex Watts :

But it was not discussed as a term. Did you say you must not contact C?

Alex Watts :

If the answer is no, then it is not a term.

Customer:

I did say that

Alex Watts :

Did you say you can not get the products from C, then if not then it was not a term

Alex Watts :

You can assume, but assuming does not mean it is part of the contract

Alex Watts :

If it was a term that C said no contact then potentially you could sue for breach of contract

Alex Watts :

But you would have to show to the court it was an express written term or agreed between and and C.

Customer:

B agreed not to get the products from C

Alex Watts :

You need to say when it was discussed, words used, who was present, witnesses and prove on balance it was a term

Alex Watts :

Ok, then I will tell you what you need to do.

Alex Watts :

If you go to Court and lose then you will be liable for C's costs of defending the action. Typically around £15,000 or so

Alex Watts :

You need to complete form N1

Alex Watts :

http://hmctsformfinder.justice.gov.uk/courtfinder/forms/n001-eng.pdf

Alex Watts :

And form N16a

Alex Watts :

http://hmctsformfinder.justice.gov.uk/courtfinder/forms/n016a-eng.pdf

Alex Watts :

The court fee just to issue the claim is £250

Alex Watts :

The Court will list the matter for hearing and decide whether the matter is contested.

Alex Watts :

If it is then the matter will be set down for a final trial.

Alex Watts :

The judge will decide in the interim whether to grant an injunction stopping C sending items to B.

Customer:

If I am in the right what can (amount) I sue for

Alex Watts :

If the Judge does and it is breached then this is contempt of Court and they can be warned, fined or sent to prison

Alex Watts :

Further Court fees (not legal fees) are:

Customer:

How do I refer to this after we have finished

Alex Watts :

Once you rate the format changes, nothing else.

Alex Watts :

As for amount you are suing for, loss of profit, but you need to show what it is

Alex Watts :

Court issue fee £250

Customer:

Loss of profit for 1 year??

Alex Watts :

Fast track trial fee if below £25,000 claimed - £545

Alex Watts :

Above £25,000 fee is £1090

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

I have to go for a couple of hours can I continue asking a couple of more questions for no extra fee?

Customer:

Loss of profit for 1 year only

Alex Watts :

Only if its related. Remember the fee you pay is for limited advice, rather than hours and hours, ie going to a Solicitor on the High Street who charges £200 an hour.

Alex Watts :

But you put the figure for loss of profit, issue the claim and seek an injunction

Alex Watts :

But as I have said, if you lose, you are liable to pay the fees

Alex Watts :

And the difficulty you have is confirming this was a term of the contract

Alex Watts :

Can I clarify anything else for you?

Customer:

I think there is nothing else - pls confirm my fee is £56 only

Alex Watts :

Confirmed its a one off fee.

Alex Watts :

If I could ask you to rate my answer before you go today please, the button should be at the bottom of the screen

Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
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