Contractor ageement disputes

This type of agreement is very widespread in the context of commercial relations. The parties to it can be individuals and organizations alike.

If one of the parties to an agreement is an individual, the dispute will be heard in a general jurisdiction court. Thus, if the lawsuit is filed by a Customer who is an individual, the norms of Law N 2300-1 of the Russian Federation “On consumer rights protection” as of 2/7/1992 will apply. As for the plaintiff in such cases, that could be a Customer or a Contractor.

If the parties to the agreement are organizations or sole proprietors, the dispute will be heard in an arbitration court.

If the plaintiff is a Customer, usually these lawsuits will usually be filed out of a job being done poorly, a missed deadline, or failing to do a job at all.

Meanwhile, if the lawsuit is initiated by a Contractor, this is normally due to incomplete payment or failure to pay for a performed job.

In our practice, we have seen cases where the Customer has sued to terminate a contractor agreement practically right before the job was completed, citing that the result of the works being performed was no longer necessary to them. It’s worth noting that the Contractor completed development of a new ware and manufactured samples that were supposed to undergo final testing by the Customer. Upon receiving the samples and documentation, the Customer decided to sue to terminate the agreement. Meanwhile, over the entire time that the samples were being developed, not once did the Customer voice any complaints regarding the timetable for executing the agreement.

Another court dispute involved a Contractor who provided concessions and performed emergency work without any agreement concluded, since the Customer promised to sign an agreement and send over the agreement later. Ultimately, the job was carried out, but the Customer didn't pay for it and totally stopped responding to the Contractor. The court took the Customer's side, since there were no documents proving that the Customer placed an order for such works to be performed other than bills and service acceptance certificates.

Thus, it's very important to consider all the necessary documents before going to court – agreements, cost sheets certificate, bills, etc. The documents must be signed by both parties and duly formalized. Upon examining this category of disputes, courts primarily study and go off of documents, not the explanations or testimonies of the parties.

In concluding a Contractor Agreement, it's important to pay attention to the essential terms of the agreement. These include the scope and timetable of the agreement. Some courts also include the terms of the cost of the works and the payment procedure among these essential terms. Thus, it must be indicated as specifically as possible which works are to be performed and what results the Customer expects to get.

Such an agreement will prove an invaluable asset in court. Sometimes, unscrupulous customers declare that no agreement was ever concluded, since the scope and other essential terms of the agreement were not defined. In our practice, we have seen cases where works were fully performed but the other party never signed any acceptance certificate and did not transfer any payment, arguing in court that not all the essential terms of the agreement were set out. In that case, the scrupulous party will have to gather and submit additional documents to the court to prove that they are right.

As a whole, contractor agreement court disputes, as generic as they may seem, always their own unique details. The lawyers at Word & Law Company will help you at the agreement conclusion stage to determine what potential risks you may be facing and list out the important terms to you, as well as assist you on the court hearing stage to stand up for your violated interests. Give us a call or send us a message today!