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As a mechanic, you may have several employees, but you may also need the assistance of contractors when you have an influx of customers coming in or when you need the assistance of someone with specialised knowledge on a certain car manufacturer. Contractors can also be used for other aspects you may not service, such as towing, tinting or painting.

The importance of a Contractors Agreement

The principal-contractor relationship can often go smoothly with only verbal agreements in place. However, formalising an agreement at the start of any business relationship can help to keep you protected if a dispute arises later on. Although it takes time and effort, having your arrangement down in writing means you will have evidence of what was agreed between you and your contractor.

What kinds of disputes could arise?

Disputes that could arise with your contractor include you:

  • did not reimburse a contractor for a part that was needed for a customer’s repair and they assumed you would;
  • forgot to pay the contractor’s invoice on time;
  • received a complaint for a paint job that your contractor performed; or
  • had been using the services of a contractor on an ongoing basis and recently started to give them less work.

Resolving the dispute with your contractor

Despite what the dispute is actually about, a good way to start resolving the matter is with an informal discussion. This in itself may be enough to clear up any misunderstanding there may have been and enable you to resolve the matter quickly. If not, you need to be open to negotiation. When tackling the problem make sure you know what the problem is and that you communicate the problem clearly to your contractor.

If a written contract was drafted – review it! Having a read over your duties and obligations to each other may give you a clearer understanding of who is responsible in this case.

Your contract may also have a dispute resolution process in place that you should follow.

Dispute Resolution

Firstly, you could engage in a process called mediation, which involves meeting with your contractor and a neutral third person who ensures that both you and your contractor understand all the facts involved. The mediator will help both of you to reach an agreement that will hopefully restore your working relationship. Alternatively, you could seek arbitration, in which a neutral third person hears all the facts, listens to both sides of the dispute and reaches a decision, which is binding on both you and your contractor. Finally, you could seek to go straight to court if you feel the options above will not help you in your situation.

Conclusion

It could be that the dispute can be resolved by a conversation, but, if necessary, you should consider some form of alternative dispute resolution (such as mediation or arbitration). Before you take action, it is a good idea to get legal advice. A lawyer can provide you with a clearer picture of the strength of your argument (potentially saving you a great deal of time and money) and, if not, at least help you draft a written agreement for your next contractor!

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