Four common types of contractual disputes and how to avoid them

Last updated: 3 June 2021

Estimated reading time: 3 minutes

Member View

We understand that starting a new business can be an extremely exciting time, full of possibility and with lots of opportunities and potentially fruitful partnerships ahead. However, because the early stages of setting up a company can be such a busy time, we often find that start-ups come to us further down the line seeking help with common contractual disputes. To help you avoid encountering some of the more typical pitfalls you might come across, we’ve put together this short guide to the most common types of contractual disputes and what you can do to avoid them. 

Jump to: 

  1. Common reasons for shareholder disputes 
  2. Potential problems with commercial property leases 
  3. Issues with supply of goods/manufacturing agreements 
  4. The absence of Non-Disclosure Agreements (NDAs) 
  5. Final thoughts on common disputes

Common reasons for shareholder disputes 

A scenario we see fairly often is where family or friends have set up a company together, and while all goes swimmingly at first, disagreements that can quickly escalate into a full-blown fall out can happen more easily than you would think. Everything seems and feels all the more personal because of the original nature of the relationship – that being a friendship or a family tie – and it’s because of this very fact that putting together a proper shareholders’ agreement right at the outset is vital. 

Potential problems with commercial property leases 

You might be so keen to get cracking with setting up your business premises that you rush ahead and sign a lease on an office or unit without giving the contract provided by your landlord more than a cursory glance.  Then, a couple of years in, you decide that you would like to move to different premises – but find that there is no break clause in the lease in order for you to extricate yourself from the contract smoothly. For reasons like this, it’s advisable to seek the help of an experienced commercial property solicitor to cast an eye over the terms of a business lease before signing it. 

Issues with supply of goods/manufacturing agreements 

Time and again, we see start-ups running into problems when they begin trading, because they have readily accepted the terms of a contractual agreement provided by a supplier that simply doesn’t cover all eventualities. Suddenly, they find themselves struggling to meet customer demand due to consistently late delivery of products from the supplier, or sub-standard goods start filtering through. Don’t let this happen to you: ensure that all contractual documentation is properly checked so that your legal position is as solid as possible. Particularly, if the stakes are high, then it’s best to instruct a commercial lawyer to help you with drawing up and/or checking such agreements. 

The absence of Non-Disclosure Agreements (NDAs) 

A classic example of where start-ups can stumble in relation to matters of confidentiality is where an ex-employee leaves to set up on their own and becomes a direct competitor, therefore causing irreparable harm to the start-up’s business. This is where the importance of having an NDA drawn up for each staff member cannot be understated, because it will protect confidential information that goes to the heart of your company and will go a long way towards preventing a situation like this from arising. 

Final thoughts on common disputes

The above examples are only the tip of the iceberg of some of the more common problems we see start-ups run into. The key takeaway from this short guide is that having all documentation pertaining to your business in good shape is absolutely crucial. Our team of skilled commercial lawyers are equipped to help you with getting your contracts and agreements right, so that you can enjoy the dream of setting up your own company safe in the knowledge that the legalities and the paperwork are just as they ought to be.

Back to table of contents

What next?

Please leave us your details and we’ll contact you to discuss your situation and legal requirements. There’s no charge for your initial consultation, and no obligation to instruct us. We aim to respond to all messages received within 24 hours.

  • Your data will only be used by Harper James Solicitors. We will never sell your data and promise to keep it secure. You can find further information in our privacy policy.

  • This field is for validation purposes and should be left unchanged.
  • This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

A national law firm

We mainly work remotely, so we can work with you wherever you are. But we can arrange face-to-face meeting at our offices or a location of your choosing.

Our commercial lawyers are based in or close to major cities across the UK, providing expert legal advice to clients both locally and nationally.

Floor 2, Cavendish House, 39-41 Waterloo Street, Birmingham, B2 5PP
Stirling House, Cambridge Innovation Park, Denny End Road, Waterbeach, Cambridge, CB25 9QE
10 Fitzroy Square, London, W1T 5HP
13th Floor, Piccadilly Plaza, Manchester, M1 4BT
Harwell Innovation Centre, 173 Curie Avenue, Harwell, Oxfordshire, OX11 0QG
2-5 Velocity Tower, 1 St Mary’s Square, Sheffield, S1 4LP
Like what you're reading?

Like what you're reading? Get new articles delivered to your inbox

Join 8,067 entrepreneurs reading our latest news, guides and insights.

Subscribe