Contractual conflicts – the role of mediation in resolving supplier issues - Palmers Solicitors

Contractual conflicts – the role of mediation in resolving supplier issues

Contractual conflicts – the role of mediation in resolving supplier issues

An efficient, reliant supply chain is crucial to the proper functioning of a business.

For this reason, properly drafted supplier contracts are an important tool for businesses to use to ensure that their needs are met on time, on budget and on track.

When this supply chain and supplier relationship breaks down and orders aren’t fulfilled, or there is a payment, quality or exclusivity problem, disputes may arise as businesses and suppliers seek to minimise damages and protect themselves.

Mediation expert Luke Morgan will demonstrate why mediation plays a vital role in resolving issues with supplier contracts while maintaining strong working relationships.

Types of disputes

While there are a number of disputes that may arise as a result of supplier issues, some are more common than others.

One of the major issues that may arise is that the supplier has failed to meet their contractual obligations, causing the business they supply to suffer losses. This may include:

  • Failure to deliver products to the required standard
  • Delivering supplies late or incomplete
  • Pricing discrepancies or hidden costs
  • Inconsistent supply

Businesses may also be at the root of disputes, typically because of non-payment.

Non-payment may be as a result of mismanagement, internal delays or as a response to quality or other supply issues. This can complicate existing disputes and further deteriorate the working relationship.

Another area of concern for both parties is exclusivity clauses.

Exclusivity is a complex issue that typically requires a supplier to avoid supplying a product to a business’ competitors. In return, businesses will only buy a particular product from that supplier.

For reasons of non-disclosure, economies of scale and a high degree of collaboration, these clauses can be mutually beneficial, but may result in complex disputes if breached.

Why mediation is the first step forward

Offering a flexible, non-combative alternative to litigation, mediation is invaluable to maintaining relationships with suppliers.

Appropriate mediation measures are there to prioritise the needs and obligations of all parties, taking an impartial approach to achieve a mutually beneficial outcome.

Benefits to all parties of mediation include:

  • Cost – mediation is typically far less expensive than legal proceedings.
  • Efficiency – contentious proceedings can take a long time, during which time the problem is likely to continue. Contrary to that mediation can bring about a solution to any dispute sooner.
  • Relationships – mediation is constructive and avoids adversarial proceedings, protecting your business relationships.
  • Confidentiality – fewer parties need to be involved in mediation than in lengthy court proceedings.

We can also provide legal advice during the mediation process, allowing you to reach a satisfactory agreement without breaching any regulations.

How we can help

Our dedicated mediation team can help with all manner of supplier disputes where any party is in breach of their obligations.

We can help to resolve issues amicably and to the mutual satisfaction of both parties, allowing you to move forward and rebuild your working relationship.

Speak to our team today for expert mediation services and support.