Can a company claim to have been mis sold a contract?

[traxx]

Legal question here

Obviously there is a lot of publicity regarding mis selling of financial products to individuals

However what happens if I company has signed a contact and now claims not to have really understood what it was signing up to

Does a limited company also have protection - if so where would I find the law?

Sorry if the answer is easy to find but any type of internet search related to mis selling just comes up with PPI claims

[anonymous-user]

Is it a bank on the other side of the contract?

[tight fart]

A friend of mine was caught by a swaps mortgage loan, he did eventually get
settlement from the bank, his accountant was also caught, he never got compensation
as it was considered he should have know better.

[sidicks]

Why would you sign up for something that you don't understand?

Some people seem to want to take certain risks to benefit from the upside but then plead mis-selling if those risks come home to roost.

Of course a small proportion were genuinely mis-sold.

[akirk]

I think there is an expectation that businesses are professional / would use professional advice

[hairyben]

akirk said:

I think there is an expectation that businesses are professional / would use professional advice

I was targeted by BT for what many people call a scam they ran a few years ago. Basically targeting small tradies with high pressure sales techniques, suggesting they had hoards of customers you'd have access to if you signed up to their "BT customer street" service. As soon as you said "yes" they decided you were in a legally binding contract, and as soon as the poor sucker realises the monthly payment plan in real terms was £9000 over 3 years for a 2 bit website and tried to cancel, BT promptly inform him that long distance consumer protection/cooling off doesn't apply to business, as a business he should have a "professional buyer" and please speak from now to our nasty aggressive lawyers tasked with frightening you into submission.

Was a real piece of work, given they target small traders who are as susceptible to pressure sales as any member of the public - didn't "get" me but spent 6 years calling me weekly despite constantly telling them to stop... Had to say something pretty abhorrent to one of their girls then the calls stopped.

Someone who'll never use BT for anything ever!

[traxx]

JPJPJP said:

Is it a bank on the other side of the contract?

Its nothing to do with a bank - its where a business has agreed to buy a product from another company and is now claiming that no one ever explained that there was a minimum contract quantity

Clearly they knew exactly what they were doing but are trying to get out of the payment obligation by claiming the contract was mis sold

[NDA]

traxx said:

Its nothing to do with a bank - its where a business has agreed to buy a product from another company and is now claiming that no one ever explained that there was a minimum contract quantity

Clearly they knew exactly what they were doing but are trying to get out of the payment obligation by claiming the contract was mis sold

It depends what the contract actually says. Was there a minimum guarantee written in the contract?

[akirk]

traxx said:

Its nothing to do with a bank - its where a business has agreed to buy a product from another company and is now claiming that no one ever explained that there was a minimum contract quantity

Clearly they knew exactly what they were doing but are trying to get out of the payment obligation by claiming the contract was mis sold

that has nothing to do with being mis-sold...
the contract / associated communication either does say that there is a minimum quantity, or it doesn't - if it states a minimum, then they have no argument, if it doesn't then they need not pay - it is an argument about the contractual position...

being mis-sold is where both sides agree that that a contract commits the party to xyz - but they didn't need xyz and only bought it / accepted it contractually because they were told they had no choice / they had to accept xyz to get abc / etc.

i.e. in mi-selling there is no contractual dispute, but a dispute about why something appeared in the contract / was included
your example is an argument about the contractual position - they have no issue with the purchase / core contract (i.e. it wasn't mis-sold), but have a disagreement about the contractual terms

so if they are claiming mis-selling they are wandering in the wind without a case...

[traxx]

Thanks for the answers

The contract clearly states a minimum quantity but the customer is claiming that the amount is higher than he could have needed and the supplier should have pointed this out. Im lost on this as its not as if this quantity is hidden away in a small clause - its a main part of the contract which the buyer happily signed. When you read the original notes the customer was planning on expending but this hasn't happened which is why they have effectively over contracted

My view was this is a simple contractual dispute but they have started throwing in this mis selling idea

The whole thing is also not helped by the fact that the original seller sold that part of the business so the current holder of the sales contract wasn't the company that entered into the transaction

Edited by traxx on Wednesday 14th March 10:11

[Marcellus]

traxx said:

Thanks for the answers

The contract clearly states a minimum quantity but the customer is claiming that the amount is higher than he could have needed and the supplier should have pointed this out. Im lost on this as its not as if this quantity is hidden away in a small clause - its a main part of the contract which the buyer happily signed. When you read the original notes the customer was planning on expending but this hasn't happened which is why they have effectively over contracted

My view was this is a simple contractual dispute but they have started throwing in this mis selling idea

The whole thing is also not helped by the fact that the original seller sold that part of the business so the current holder of the sales contract wasn't the company that entered into the transaction

Edited by traxx on Wednesday 14th March 10:11

If the contract that the buyer accepted states a minimum quantity than that's all the supplier is enforcing then the buyer really has nowhere to go/hide/complain about.

If they're really not needed then perhaps the buyer could try and negotiate their way out of taking delivery.

It's one of the oldest tricks in the for book a buyer to overstate their volume requirements to get additional discount and then not delivering their side of the contract!

[NDA]

traxx said:

Thanks for the answers

The contract clearly states a minimum quantity but the customer is claiming that the amount is higher than he could have needed and the supplier should have pointed this out. Im lost on this as its not as if this quantity is hidden away in a small clause - its a main part of the contract which the buyer happily signed. When you read the original notes the customer was planning on expending but this hasn't happened which is why they have effectively over contracted

My view was this is a simple contractual dispute but they have started throwing in this mis selling idea

The whole thing is also not helped by the fact that the original seller sold that part of the business so the current holder of the sales contract wasn't the company that entered into the transaction

It clearly hasn't been mis-sold.

There is something in law called 'rectification' where a court can order a change in written contract to reflect what ought to have been said in the first place - but I can't see that applying here. (I am not a lawyer).

If the customer is valuable, I guess you could split the difference, if not, let them attempt their claim. They'll fail.

[Hoofy]

Legal stuff aside, I guess if you don't negotiate something nicer then you've got a fed up customer who will tell other potential customers.

[AyBee]

traxx said:

Thanks for the answers

The whole thing is also not helped by the fact that the original seller sold that part of the business so the current holder of the sales contract wasn't the company that entered into the transaction

How do they know they were mis sold if they're not the ones who entered into the contract in the first place? Isn't this buyer's due diligence, i.e. they should have read and understood the contracts they were buying into when they bought the company?

[Europa1]

NDA said:

There is something in law called 'rectification' where a court can order a change in written contract to reflect what ought to have been said in the first place - but I can't see that applying here. (I am not a lawyer).

I can't see it applying either - rectification generally isn't available where only one party is mistaken about the contract.

[anonymous-user]

It's possible but in these circumstances unlikely.

Eg.
If there was a clear exchange discussion 1 item and letters/emails showed that and the contract was signed showing 100 items.

However it's pretty tenuous and they'd have to show that the contract was deliberately changed with intent.

[Europa1]

Hoofy said:

Legal stuff aside, I guess if you don't negotiate something nicer then you've got a fed up customer who will tell other potential customers.

Yep, legally it sounds from the facts like the OP is on solid ground. What OP should actually do is a commercial decision.

[Marcellus]

desolate said:

It's possible but in these circumstances unlikely.

Eg. If there was a clear exchange discussion 1 item and letters/emails showed that and the contract was signed showing 100 items.

However it's pretty tenuous and they'd have to show that the contract was deliberately changed with intent.

I'd disagree; even had the supplier introduced the minimum order quantity in the final version of the contract and that was what the buyer accepted that is the contract that is enforceable. In B2B it would be deemed that the revised contract is a new offer which is accepted by the buyer, it's called "battle of the forms". It is for exactly this reason why most companies will try to ensure that their contract is the final one to be exchanged!

However, in this instance it appears as though the buyer willingly and knowingly entered in to the contract with a minimum order quantity but their requirement changed so they no longer need the balance of the order.

Europa1 said:

Yep, legally it sounds from the facts like the OP is on solid ground. What OP should actually do is a commercial decision.

Are you sure you've got that the right way round; the OP is the buyer not the seller!

[EVLATECOMER]

Marcellus said:

Are you sure you've got that the right way round; the OP is the buyer not the seller!

Are you sure about that?

Either way typical lack of due dilligience appears to be the issue at hand.

[Marcellus]

Not sure where due diligence comes in to it..... sound like simple reading gefore signature would have sufficed.