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It’s a situation faced by many businesses –
you have a supplier of some specialised equipment which fails to
perform to your satisfaction or the installation is postponed again
and again. You start to argue over what the equipment was supposed
to do; when it was meant to be on site; who said what to whom - the
blame game begins.
If the situation is beyond salvation the question then arises – how
do you pull the plug and terminate your agreement? More importantly,
how do you make sure you recover your losses?
Understand
The first thing to understand is that you have just entered a legal
mine field. If you seek to terminate the agreement and are later
found to have insufficient cause or terminated in the incorrect
manner, then your company may become liable and you could end up
paying the supplier! Even if you do have sufficient “cause” to sack
your supplier, the terms of your agreement may seek to limit or even
exclude completely all your losses.
The courts have recently dealt with a number of cases where
suppliers have tried to exclude liability for late or incomplete
delivery of services and equipment. These cases have highlighted the
need to take expert advice before “pulling the plug”.
Agreement
It is vital that you understand the terms of the agreement with the
supplier and plan carefully the termination of any agreement. This
is one of the most critical phases of any potential dispute and if
handled correctly can greatly minimise the costs of any arguments
and maximise the recovery of any losses. With some forward planning
and the correct advice, the termination of any arrangement with a
supplier can be handled smoothly and effectively.
If you have any issues or concerns about your existing arrangements
with suppliers then please contact
Nick Scott on 0844
8000 263 or email
nick.scott@taylors.co.uk.
Copyright 2006 - 2010 Taylors Solicitors
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Pulling
The Plug