Business-to-business disputes over poor after-sales service
If your company has invested in new plant and machinery or IT systems, then the after-sales support is likely to be a key element of achieving a return on your investment. Given that you usually need to maintain a working relationship with the supplier, what are your options if the after-sales support is poor?
‘Most post-sale disputes in B2B contracts arise because the supplier fails to respond appropriately to a buyer’s problems by not providing promised technical or practical after-sales support,’ Tim Newsome, dispute resolution lawyer with Myers & Co Solicitors in Stoke-on-Trent explains.
‘Disputes also arise where a supplier refuses a request for product repair or replacement, the repeat performance of services, or a full or partial refund together with compensation.’
Sometimes this failure is attributable to poor after-sales procedures, but more often than not it is down to the business not understanding the legal obligations they have. Sometimes, they steadfastly refuse to offer better recompense than their terms and conditions provide, even where those terms and conditions are demonstrably unfair and therefore potentially unenforceable.
Finding out what your rights are is an important first step but so too is talking to a solicitor about the different approaches you can take to achieve the outcome you want without ruining what may otherwise be a good commercial relationship.
Your rights in a B2B contract
As a buyer in a B2B contract you have the right to insist that you are provided with whatever has been promised within the agreement you signed up to, whether that is the straightforward supply of goods alone or goods with a service element included, such as the provision of a 24-hour aftersales support helpline.
In addition, you have the right to expect that:
- goods will match the seller’s description and be of satisfactory quality and fit for purpose; and
- services will be carried out with reasonable skill and care, within a reasonable time and for a reasonable cost (where time for performance or the price were not previously agreed).
Where a product warranty or service guarantee has been issued, you also have the right to insist that the promises made under them are honoured.
Rights of redress
In the event that a problem arises your rights of redress will depend on the deal you have agreed. For example, in a sale of goods contract with the seller you might have a limited right to insist on repairs being carried out free of charge where a fault occurs within six months, but a corresponding right to insist on a free replacement for up to 12 months under the terms of an accompanying manufacturer’s warranty.
You will need to consider the terms and conditions of your contract documentation carefully to ascertain your rights and who they can be enforced against, whether that is the seller, supplier, manufacturer or some other third party such as an insurer.
Unfair contract terms
Difficulties can arise where the rights of redress available fall short of what you were hoping for because of contractual provisions excluding or restricting the seller’s or supplier’s liability. In these circumstances, the Unfair Contract Terms Act may allow such provisions to be challenged if they seek to exclude or restrict liability for loss or damage arising from the seller’s or supplier’s:
- failure to comply with their contractual obligations where you have been forced to deal on their standard terms and conditions;
unless in either case the provision imposing the exclusion or restriction can be said to be a reasonable one in all the circumstances.
For example, in B2B sale of goods contracts it is generally accepted that a provision excluding the right to a full refund will not be unreasonable where any fault is only slight.
Dispute resolution options
There are a lot of things to consider where an after sales dispute arises, and many variables that will influence the scope to negotiate a better outcome than the one you appear contractually entitled to. Because of this, it is essential that you take legal advice at an early stage.
The best strategy will depend on the strength of your position and whether any potentially unfair provisions might be challengeable.
In most cases we would suggest taking the following four stage approach:
- contact us so we can review your contract documentation to determine what rights you have and against whom, and in the light of what you would like to achieve;
- instruct us to make contact with the seller or supplier to explain your concerns and suggest pragmatic solutions as to how they might be addressed;
- where the seller or supplier remains unconvinced of their need to be more accommodating, consider the use of mediation or another alternative dispute resolution mechanism; and
- where the value of what is at stake is high enough and we have advised you that you have a strong chance of achieving your desired result, then consider issuing court proceedings.
If you need help resolving a business dispute, please contact Tim Newsome on 01782 525011 or firstname.lastname@example.org to see if we can assist.
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.