AboutTimmy Chou Expertise I am a experienced Mediator and a partner in a management consulting firm. As a mediator I work as a third-party neutral and specialize in partnership/shareholder disputes, management/labor issues, company culture difficulties, and family-owned business problems. I can help describe why alternative dispute resolution may be a good choice for you. As an experienced management consultant I may be able to offer creative ideas to help resolve your organizational and business problems and disputes. "If you say conflict, I say opportunity".
Expert: Timmy Chou Date: 6/25/2008 Subject: Contract and service delivery issue
Question Hello,
First, thank you for sharing your knowledge here.
Back in February my company signed up for service with a colocation service provider. We have a contract and a quote for set amount of cabinet space. Our move in date was April 1st, which was delayed by two weeks because the space wasn't ready. When we finally moved in our equipment, we found that the available space was about half of what was sold to us as per the quote. We notified the provider and they said they will correct at a later date when we need the remaining space. We agreed. During that month there were a number of issues and the provider said they will moving their customers to a new location. We agreed provided that we move our equipment ourselves. They agreed to that then one night our servers went down because they provider moved our equipment without our authorization. Once we were able to get there the next morning we found that our equipment was installed in a space that was even smaller than before (3u) and there was no network or power so our systems were completely down. The new location was a work in progress (another way of saying it was in complete disarray) so we agreed with the provider to take our equipment off site until the space is available. After two weeks space was still not available so we told them we can't wait any longer and are terminating the contract on the grounds that they failed to deliver what they quoted us. The provider is now threatening legal action for breach of contract.
We have all of this in writing along with pictures of the colocation space.
The quote accompanying the contract does stipulate the set amount of colocation space. Can they hold us to this contract even after they failed to deliver the space they sold us? They had three months to correct and made a number of promises and offered a number of excuses as to why they didn't.
Thank you!
Answer Thank you for your question!
As I tell all my questioners, mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement.
I am not a lawyer, nor can I mediate your dispute with just you alone but I can respond to your question from my business consulting experience. Note that this issue may develop legal implications and you should consult an attorney.
Your best defense may be a good offense. You undoubtedly have suffered expenses and other harm from the poor service you have received. My advice, assuming there are not provisions in the contract preventing it, would be to prepare and send an invoice for the damage and for the fees you paid for service you did not receive. Include a letter documenting the contract violations and expenses and have your attorney send the letter. This will be effective especially if you think that you will almost certainly be sued--you might as well control what the suit is about. However, they might just get the message and go away too.
Document all contracts and every instance of meetings and subsequent changes. Be sure to document all the parties who were there and be as detailed as possible.
You also may want to find out all the state and local regulatory and trade organizations that may be important to the company. This list may include:
State License Board
State Consumer Affairs/Ombudsman
Better Business Bureau
Local and municipal officials
The press (print and TV)
Trade organizations important to the company
Send a copy of your letter to the entire list and every other imaginable consumer resource you might have available in your city. Make sure your letters note that you have sent copies to all these people.
The goal here is to get the company to realize it will cost a lot more to deal with all the collateral damage you will cause them by your willingness to proclaim their nefarious business practices to everyone, and they will just take care of you. Make sure they know you will stop at nothing and you will continue to tell your story to everyone.
You seem to have a good case for court so if you have to go to court be sure to document, in a chronological way, all these events as they unfold so the judge can see clearly that you have been mistreated.
These are some ideas. Feel free to follow up with additional questions.
For your information, the pros and cons of the types of dispute resolution methods follows.
GOOD LUCK!
Arbitration, Mediation, and Litigation
Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system
Benefits of Arbitration:
Confidential, no public record
Limited exchange of documentation, information
Quick, don't have to wait for a court date
Arbitrators have expertise in the subject matter and are trained in conflict resolution
Cheaper than litigation
Preserves business relationships
Negatives of Arbitration
It's a compromise, no %100 winner
Complex arbitration can be costly
If not satisfied, may litigate the arbitration procedure
Poor results with an unskilled arbitrator
Both parties must agree to cooperate in the process
Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.
Benefits of Mediation:
Neutral mediator can objectively suggest alternatives not considered before
Parties are directly engaged in negotiating the settlement
Can be quicker than litigation
Less costly than litigation
Preserves business relationships
85% of American Arbitration Association cases mediated find successful solutions
Negatives of Mediation
may not reach a binding decision
unskilled mediator
Litigation: using the judicial system to resolve disputes
Benefits of litigation:
a clear winner and loser
uses a prescribed set of procedures
more predictable outcomes
is final
Negatives of Litigation:
waiting for court dates can do more harm
usually more expensive than mediation and arbitration
part of the public record
