Rising fuel costs could lead to maritime contract disputes

On Behalf of | May 19, 2023 | Uncategorized |

Fuel costs can easily become a point of conflict between two companies that are parties to a contract related to maritime goods or services. Perhaps a maritime transportation company signed a fuel contract with a provider that now insists it will not uphold the agreement because of increasing oil prices.

For example, perhaps an oil and gas company signed a contract for worker transportation to and from offshore platforms. Rising fuel costs might influence the contract they have with a charter airplane company or boat fleet that helps their workers reach a job site. The company may try to demand changes to the contract and that the client or customer absorb those cost increases. When there is already a contract between two businesses and circumstances change, the parties may end up in a bitter disagreement about what should happen next.

Companies typically need to stand by their contracts

When a company negotiates a contract with another organization to provide services or supplies, the process should include thorough research so that the price quoted reflects not only current expenses but how the market may fluctuate throughout the contract period. They may also want to include clauses that allow for renegotiation or that grant the ability to invalidate the contract over matters like changing market prices.

If entrepreneurs and salespeople fail to perform their due diligence when making offers or negotiating contracts, their companies may end up paying the price in the long run. Provided that there is a written agreement, a company will typically need to abide by its promise to provide fuel at a certain price or to transport workers at a set cost.

Sometimes, the businesses that contract with service providers and suppliers recognize that market fluctuations necessitate adjustments to their arrangements and will agree to rework the contract. However, if they are not willing to compromise, the business that set its own prices too low may have to accept the loss or face the possibility of litigation.

Seeking legal assistance and going to court may sometimes be necessary to hold another business accountable for adjusting its prices in violation of a signed contract.