HOW TO AVOID DISPUTES AND LITIGATION, WHETHER PERSONAL OR IN BUSINESS.

My experience in assisting clients to resolves legal disputes, whether personal or business in nature have led me to conclude that in 99% of cases the dispute can be avoided. Usually, the reason they have reached the point of needing my assistance is because there has been a total breakdown in communication.

Think about the last time you had a really good argument with your spouse. Maybe you didn’t talk to each other for a few hours or in some cases a few days. What was the circuit breaker in the end that got you back to talking each other? Almost certainly, one of you had to break the ice and say, “Let’s talk about this”.

The same applies to business disputes. One of the first things I ask a client who has a business dispute is, “Have you tried to sit down and talk to the other party?” Often, I am told it is a waste of time because the other party won’t accept their point of view. When I tell my client about the court process and what might happen if the court doesn’t accept their view, they are usually more open to trying to have an informal discussion with the other party.

Keeping the lines of communication open is very important. But there are also some other preliminary things that could be done to avoid a misunderstanding.

PUT IT IN WRITING

If there is no agreement recorded in writing it is much more likely that a dispute will arise. A recent case decided in the Consumer Trader and Tenancy Tribunal is a good example of this.

The applicant had booked a helicopter joy ride on a particular day in December to show some overseas visitors Sydney harbour. She telephoned the respondent after finding them through directory assistance. The applicant told the Tribunal that she had spoken to an employee by the name of James and informed him that she only wanted to take the ride if the weather was “sparkling”. Her evidence was that James advised her that, if the weather was not good, she could re-schedule. On the strength of what James had said she paid the sum of $435.00 by credit card to take the joy ride.

On the day that she had booked, the weather was not “sparkling”. There was some evidence before the Tribunal that on the particular day, Bondi Beach was closed due to the remnants of a cyclone.

The respondents case was that they would allow changes only if they were unable to fly due to the weather. James gave evidence for the respondent. James told the Tribunal that he remembered the applicant indicating the need for sparkling weather. He said he could not recall precisely the details of the conversation but he told the applicant that if the weather was unsuitable for flying it could be re-scheduled.

The tribunal found that there was a mutual mistake between the parties and the contract was void. The respondent was ordered to refund the $435.00 to the applicant.

So, what could have been done differently? Preferably, the respondent should have sent a letter to the applicant after taking her booking advising the precise conditions upon which she could re-schedule the flight. This would have avoided there being any “mistake” by the parties regarding the terms of the contract.

TAKE THE TIME TO READ THE CONTRACT

How many times have you ordered something on line and you have ticked the box acknowledging you have read the terms and conditions without actually doing so? I must confess, I myself have done this, but every time I have, I have told myself, if things go pear shaped I am going to lose my money.

In our fast paced lives, it can feel a bit onerous to sit and read a lengthy legal document. Most legal documents today are required to be in plain English. If they are not, or you don’t understand what you are reading you are better off not signing the agreement until you have received legal advice and had it explained to you.

MAKE NOTES OF CONVERSATIONS

This is particularly important when there are variations to the agreement or a fundamental term is being agreed.

In another case decided in the Tribunal, the applicant operated a business providing online corporate Christmas cards. The respondents were website designers. The applicant engaged the respondent to design their website so that the applicant’s customers could upload and manipulate their high resolution logos and other images on the website.

A 39 page specification document was prepared by the parties and signed by each of them. At a later date the parties had a meeting at the applicant’s premises. During that meeting the applicant told the respondent:

“The fundamental reason why we want our website redeveloped is to allow for the uploading and manipulation of high resolution logos and other images of at least 300 dpi in the format of PDF, TIFF or EPS files”

The applicant recalls the respondent saying:

“I have done a similar website before where logos were uploaded. We are one of the few website developers, only about 20% of us, that can do this sort of project”.

The applicant made a contemporaneous file note of that conversation.

The applicant was required to pay a substantial sum up front. After having spent many hours of work on the project the respondent was not able to provide a website for the uploading of images as required. The applicant terminated the contract.

The applicant commenced proceedings in the Tribunal seeking the refund of the monies it had paid the respondent.

The respondent’s case was that the 39 page specification document signed by the parties provided no express statement of the requirement to upload and manipulate PDF, PSD or EPS files. The respondent said that it had delivered on the requirements in the specification document and was entitled to be paid the balance of the contract price.

The Tribunal found that the requirement to upload and manipulate images as discussed at the meeting was a fundamental term of the contract and accordingly the contract was voidable. The Tribunal said that to the extent that there was an inconsistency between the applicant and respondent regarding what was said at the meeting, it preferred the evidence of the applicant.

The Tribunal ordered that the respondent refund the monies paid to the applicant.

Clearly, in this case, the strength of the applicant’s evidence was supported in the file note that had been made at the meeting.

BE HONEST WITH YOUR CUSTOMERS

Perhaps it is trite to say, but there can be no advantage in being dishonest with your customers. Your reputation is on the line. Despite how lucrative the contract may be, if you don’t have the expertise to deliver what is required you are much better to be upfront and tell the customer. You stand to lose much more than the contract at hand if things go wrong. I have seen too many clients who have an excellent relationship with a good customer lose that business because they have taken on something that is beyond their skill level.