Contracts, Claims and Disputes

Contracts are written with an intent in mind

The best contracts, in the opionion of Hermetica, are those which clearly set out an intent. These are often written by commercially oriented individuals who have a clear view of what they want to achieve - the lawyers are used to ensure that the intent is reflected in proper legal language. Hermetica has written a number of quite significant contracts. It has also rewrittern purchasing terms and conditions and associated contracts on this basis. The most significant of these was the adjacent outsourcing deal. This involved different countries, a sensitive topic, and extensive terms to cover most eventualities. The claim referred to was interesting - despite losing money in the country involved, it was settled amicably..

The paper chase

Hermetica believes that if a claim escalates to a dispute, the contract has failed. More often than not a combination of unclear contract and the dreaded "paper chase" - all the correspondence which could negate or confuse the agreement - means that actual responsibility is often difficult to assign, let alone claim against. Hermetica has a lot of experience of digging out information for such purposes.

Sometimes the relationship is more important

Disputes often wreck a relationship and any chance of mutual help in the future. It is important to analyse how important the longer term relationship is, and find alternative solutions, if at all possible (see Supply Chain Risk and Non-Conformity)

A Major Europe Wide Services Outsourcing Deal

When writing this contract, and all associated schedules, there were terms I never expected the supplier to agree to. They did - the reason, they told me afer - was it was clear. There was a claim - but no dispute - the supplier honoured the intent

A dispute between an oil & gas operator and contractor

The (major) operator requested Ernst & Young do an independent review of the terms of the contract associated with the dispute. Advice was provided, but the "paper chase" made this a difficult dispute to resolve.

Unsatisfactory performance of a data centre provider

This was an existing contract between an international bank and their data services provider. The bank was deeply upset about service (they outsourced a problem!). An extensive study of the contract resulted in it being renegotiated.