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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 48488
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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I have had a business to business contract wrongly

Customer Question

Hi. I have had a business to business contract wrongly terminated. The contract has 1 year no termination clause, with a 3 month notice period. The contract was signed 15.5.16. Any advice on my first steps to gaining compensation with regards ***** ***** and loss of earnings.
Chris
Submitted: 1 year ago.
Category: Law
Expert:  Ben Jones replied 1 year ago.

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.

Customer: replied 1 year ago.
Ok. Thanks.
Expert:  Ben Jones replied 1 year ago.

Please can you provide some background information on how you have incurred costs and loss of earnings? Thank you

Customer: replied 1 year ago.
Is it possible to talk over the phone?
Expert:  Ben Jones replied 1 year ago.

I am unable to talk on the phone at present as I am in court today. However, if you provide the information requested, I will prepare my advice during the day and get back to you at the earliest opportunity. There is no need to wait here as you will receive an email when I have responded. Thank you.

Customer: replied 1 year ago.
Ok. I will provide you with some background before we chat later. I am free from now till 4pm and then again after 8pm today.I signed a 3 year contract on 15.5.16 to operate a small gym at the local rugby club. I then purchased £6000 of equipment to kit out the gym to make it usable for members. The club is now saying they want to get someone else to run the gym for them and have terminated the contract on the basis that they feel there is not the right synergy between the two parties. The contract states that both parties can not terminate the contract inside the first year, and then only with a three month notice period.They now want to purchase some of the equipment from me for their own use. If I am looking for compensation, would selling them some of the equipment nullify my claim?Thanks and hopefully we can chat soon.
Expert:  Ben Jones replied 1 year ago.

Many thanks Chris. I will get back to you at the earliest opportunity.

Ben Jones and 2 other Law Specialists are ready to help you
Expert:  Ben Jones replied 1 year ago.

Hi there, unless there had been a serious breach of contract by you, the other party would have been expected to adhere to the contractual terms, including cancelling it only in accordance with the cancellation clause. In this case there was an explicit prohibition on termination within the first year of the contract, which is what they have gone and done regardless.

In a breach of contract claim the wronged party can consider making a claim for compensation. They would be seeking compensation for any losses incurred as a result of the breach. In your case that could be lost income but you will have to consider the overheads as well and deduct these from any profit you are trying to claim for. Selling the gym equipment would not automatically prevent you from claiming compensation unless the compensation was linked to the equipment, such as compensation for storage, diminution in value, etc.

If you wanted to pursue this further, if a dispute arises over compensation owed by one party to another, the party at fault can be pursued through the civil courts. As legal action should always be seen as a last resort, there are certain actions that should be taken initially to try and resolve this matter informally and without having to involve the courts. It is recommended that the process follows these steps:

1. Reminder letter – if no reminders have been sent yet, one should be sent first to allow the party at fault to voluntarily settle this matter.

2. Letter before action – if informal reminders have been sent but these have been ignored, the party at fault must be sent a formal letter asking them to resolve this amicably within a specified period of time. A reasonable period to demand a response by would be 10 days. They should be advised that if they fail to do contact you in order to resolve this matter, formal legal proceedings will be commenced to pursue the compensation due. This letter serves as a ‘final warning’ and gives the other side the opportunity to resolve this matter without the need for legal action.

3. If they fail to pay or at least make contact to try and resolve this, formal legal proceedings can be initiated. A claim can be commenced online by going to www.moneyclaim.gov.uk. Once the claim form is completed it will be sent to the other side and they will have a limited time to defend it. If they are aware legal proceedings have commenced it could also prompt them to reconsider their position and perhaps force them to contact you to try and resolve this.

Whatever correspondence is sent, it is always advisable to keep copies and use recorded delivery so that there is proof of delivery and a paper trail. The court may need to refer to these if it gets that far.

Customer: replied 1 year ago.
Thanks Ben. What you have advised is all very useful and gives me a better understanding of what to do. So thank you.
Expert:  Ben Jones replied 1 year ago.

you are most welcome, best of luck