IWG Testimonials

Client testimonial dated November 22, 2023

As a supplier you rely on the contractual relationships with your customers for many reasons.  As well as helping to forecast the income stream for your business, you need to be able to ensure that you can plan how much stock and materials you require to fulfil your contractual obligations, and how many staff you need to deliver services and production.

‘A customer might want to terminate a supply contract for any number of reasons, but normally you would expect there to be some notification and discussion before coming to a mutually satisfactory arrangement, especially if there is to be a deviation from the terms of the contract,’ says Divyesh Popat, dispute resolution partner with Ingram Winter Green Solicitors in London.

But what can you do if a customer decides to terminate their contract without your agreement? This can have a devastating effect on your cash flow, your profits and potentially the viability of your business.

Divyesh looks at what you can do if your contract has been unlawfully terminated, and whether you can claim damages for your loss as a result of the termination.

There are two standard methods of termination of a contract: by following a contractual termination clause; or by using common law termination practice.

  • Contractual termination – a well-drafted supply contract will have a clause that deals with termination and your customer should follow these agreed terms. For example, if your contract says that a termination notice can only be given after you have had chance to resolve a breach, then you must be given the opportunity to resolve it.
  • Common law termination – if there is no clear termination clause in your supply contract, then termination must follow common law principles which are less clear and more open to argument.

Under common law your customer can terminate if there has been a ‘repudiation of contract’, but they must prove that a repudiatory breach (i.e., a serious breach) has occurred, for example:

  • if one party makes it impossible to carry out the contract so that the essential terms of the contract cannot be complied with; or
  • if one party refuses to perform its obligations under the contract; or
  • if a significant condition of the contract is breached – for example, if the quality of the supply is not up to the required standard and cannot be used; or
  • breach of an ‘intermediate’ condition has occurred, where a breach of one of the conditions of a contract is so serious that it actually removes the benefit of the whole of the contract for the other party.

Whether there is a contract or not, either party can rely on one of the common law reasons for terminating a contract.

Can a customer terminate by giving notice, even if there is no breach of contract?

Some contracts may give either party the right to terminate a contract for no reason, as long as they give sufficient notice. If a contract is short term or low value, this notice period may be short. For higher value and more involved contracts, longer notice is usually agreed and there may be a minimum period agreed before any notice can be given.

If there is no such notice allowed for in a contract, then there must be a reason for termination.

What are your remedies if notice is not properly served?

Whatever the reason for termination, proper notice should be given to you or the termination can be invalid. A contractual term may provide a specific method and time period for the notice to be given.

If the contract is silent on the subject of termination notice periods, what is ‘reasonable’ notice will depend on the type of arrangement you have with your customer (including complexity, length of contract, damage to jobs etc). It must be very clear that this is a termination notice.

Grounds for lawful termination of a contract

If there is no right to terminate in a contract simply on notice, then your customer will need to provide sufficient grounds to show that the contract can be lawfully terminated.

If you have a contract that sets out what is to be considered a breach that justifies a termination, then they must be able to prove that your actions or inactions constitute a breach of contract.

Has the customer reported the breach promptly?

A customer should provide you with timely notice of their requirement to terminate for a breach. Depending on the terms of your contract, it may be that you should have been given a chance to rectify the breach before notice is served.

If a serious breach has occurred, but your customer has appeared to accept that breach by continuing to deal with you for a period of time, they may lose their rights to terminate the contract.

What do you need to prove your contract has been unlawfully terminated or notice not provided correctly?

This will depend on the type of contract, and the reasons given for termination (if any). When you know what has been alleged against you, gather all the paperwork you can find. For example:

  • any notices of termination which you have received;
  • record the time when you were notified of the breach and when notice was served;
  • collect emails and all relevant documentation to show that you have not caused the breach;
  • gather evidence if you think you have already remedied a breach; and
  • keep contemporaneous notes of calls, if possible.

All this will help our solicitors to establish if the termination notice has been validly completed and served.

What remedies are available?

You may be able to claim damages against your customer for reasonable losses that you have incurred as a result of an unlawful termination. This can be resolved through negotiation, or some form of alternative resolution (such as arbitration), or by a court looking at the evidence and granting an order. You can explore the best options with your solicitor.

How to assess the damage to be claimed

We will consider the overall gain that you should have, or could have, made from this contract had it not been terminated unlawfully, including possible loss of profit, as well as more obvious losses incurred such as unsold stock.

Factors to take into account in assessing damage can include the investment you made in order to meet the contract. For example, payment for materials in advance, specialist equipment, extra staff costs or premises.

This is likely to be reduced by:

  • an obligation to mitigate your losses – for example, if you need to let go of staff that were taken on to complete the contract, you cannot claim the cost of wages until the end of the contract term;
  • the extent to which you can easily sell the supplies elsewhere; or
  • the extent to which you can make up profits through a similar contract with a new customer.

How we can help

As a supplier you rely on your customers to keep their side of the bargain and continue a supply contract unless they are entitled to terminate or they discuss ending the contract with you first. If you have had a supply contract terminated unfairly, speak to one of our team. Our solicitors have many years of experience in seeking damages for losses for our clients in these circumstances.

There may also be additional concerns if you have had a contract unlawfully terminated.  For example, you need to be sure that any confidentiality clause will continue to be honoured, and you might need to apply for an injunction to prevent damage.

For further information, please contact Divyesh Popat in the dispute resolution team on 020 7845 7400 or email divyeshpopat@iwg.co.uk. Ingram Winter Green has offices in London.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

What can you do if your supply contract is terminated without your agreement?

Client testimonial dated November 17, 2023

I would also like to take this opportunity to thank you for being our family solicitor for so many years. We have always appreciated your professionalism, expertise, and friendly demeanor

Client advised by Daniel Ginsbury

Client testimonial dated October 3, 2023

We just wanted to pass on our thanks for the incredible job done by you and the team. It was such a smooth process and we felt guided at every turn. Hopefully we can team up again on any future purchases.

Client advised by Paul Sheeter

Client testimonial dated October 3, 2023

Thanks very very much…..I think the way you coordinated it all was just amazing.

Client advised by Daniel Ginsbury

Client testimonial dated September 26, 2023

Paul is the best solicitor you can find for your property purchase

Client Advised by Paul Sheeter

Client testimonial dated September 25, 2023

Thank you again for making the process so smooth and easy for us!

Client advised by Paul Sheeter

Client testimonial dated September 19, 2023

Never worried when I’m with you

Client advised by Paul Sheeter

Client testimonial dated August 16, 2023

Yay, thank you so much Paul!

Brilliant news, we’ve both so happy, thank you for making it such a smooth process.

Client advised by Paul Sheeter

Client testimonial dated July 10, 2023

Just wanted to say you’ve got a good team. Very responsive, efficient and to the point.

Client advised by Adam Pearlman

Client testimonial dated July 10, 2023

Thank you for your help and the great support you were showing me all these difficult months

Client advised by Paul Sheeter

Client testimonial dated June 30, 2023

We wanted to thank you again for managing our affairs around this purchase so well and with such diligence. We also wanted to assure you that when we have property transactions again, which we shall (both buying and selling), we would like to approach you to handle these on our behalf. We shall also of course refer friends to you should they require a first-class legal mind to assist them with their property matters.

Until such time, thank you again.

Client Advised by Paul Sheeter

Client testimonial dated June 23, 2023

You know I am the first to complain when service is not good so equally I should comment when it’s been good !!!  Paul was great and without his efforts and pragmatism we would never have got this over the line.

Client advised by Paul Gorman

Client testimonial dated June 7, 2023

Thank you so much for your exceptional representation, good advice, and explanations all the way, and absolutely outstanding work. It was really a pleasure working with you

Client advised by Divyesh Popat

Client testimonial dated March 8, 2023

…thank you so much for the excellent work you and your team have done for us in an amazingly quick and efficient way.   I have to say that it’s the first time we have experienced such pleasant and helpful Solicitors.

Client advised by Daniel Ginsbury and Divyesh Popat

Client testimonial dated February 6, 2023

With your kind and sterling Contribution, we won the planning appeal… Thank you again for all your work and look forward to staying in touch

Morris Nourani, advised by Pauline Glen

Client testimonial dated July 21, 2022

Ben provided a professional, efficient and friendly service, I was extremely satisfied with his work and advice and wouldn’t hesitate to use again and recommend.

Client advised by Ben Horack

Client testimonial dated May 18, 2022

I take this opportunity to thank you personally and your excellent team for the excellent and quick response to my case.

Nicos Lipsos, advised by David Ingram

Client testimonial dated May 18, 2022

Thanks for your efforts today, I know you’re doing your absolute best for me and you helped put my mind at ease.  It really does make a difference when you feel like someone is in your corner.

Purdy Kang, advised by David Ingram

Client testimonial dated May 18, 2022

You and Elizabeth were brilliant. Absolutely delighted with how the day turned out. Far better than I expected although your forecasts all the way through were spot on. Amazing! Thank you for your support and help over the last 3 years. Really appreciated.

Alan Gold, advised by David Ingram and Elizabeth Bartle

Client testimonial dated May 18, 2022

Paul has been my solicitor for the best part of a decade and I trust him implicitly with all my clients transactions as well as my personal ones.

Maya Carni, client advised by Paul Sheeter