PRO TIP when you face a Business Conflict

Craft Clear Agreements: When an agreement is reached, ensure it's crystal clear. Clearly articulate the terms, responsibilities, and consequences. Clarity prevents future disputes and lays a solid foundation for cooperation.

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Furniture Manufacturer V Interior Decoration Company

Date of Claim raised:25/09/2021
Date of Conciliation: 04/10/2021
Date of Settlement: 04/10/2021
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement
Case Summary

The dispute here is between a furniture manufacturer and a company in the business of interior decoration. The claimant, in this case, supplied custom furniture to the respondent for a project the respondent had undertaken. While the total cost of the order was Rs. 58,000/-, an advance of Rs. 37,486/- was paid with an agreement that the remaining would be paid on delivery. While the goods were delivered within the agreed time frame of time, the payment was not made, and a request for a 10-day extension for payment was made and accepted. Alarms were raised when the payments were not made even after a fortnight.

The Issue

The problem here was that the project that had been undertaken by the respondent, had been stuck for funds, and the extension request was made based on the promise made by the respondent's clients. Eventually, the project had to be decommissioned, and the payments receivable from the client's end did not materialise. It was also not possible to return the goods as the same was soiled in the work environment. This was handed over to PrivateCourt for a possible settlement.

The Process

The Mediator, after going through the documentation, initiated a discussion with the respondent and explained to them the fact that the non-payment by their client had no bearing on the transaction with the claimant. After some push and pull during discussions, the mediator drew the respondent's attention to the fact that litigation would be a long and costly affair and would also damage their reputation in the market. It was finally agreed that the remaining amount would be settled with no penalties in 2 instalments.

The Settlement Agreement

The respondent agreed to pay the entire amount in two instalments: Rs. 10,000/- on 30th October 2021 and Rs. 10,514/- on 30th November 2021.

The Inference

At times, arm twisting with the right motivation brings about quick settlements.