Advice on an invoice dispute

General information for the business: Furniture Importer
Industry: Business
Legal topic: Contract
Description of legal work: Hi,

We have an ongoing dispute with a supplier of ours and would like to get a better idea of our legal position.

We're a furniture importer who use a third party logistics company to store and deliver our furniture.

The issue is around the charges they're invoicing us for storing our furniture in their warehouse.

We agreed a storage charge of 50p per item.

The dispute hinges on the term 'item'. The term "item" was mis-interpreted by both parties and there was no clear definition in any contract.

Our interpretation of 'item' is that it's a complete unit (a coffee table, dining table etc..), however their interpretation of 'item' is a single carton. Most of our items (products) consist of several cartons, so this increases our expected storage costs by 2-3 times..

To provide a bit of background to the pricing, we were switching from one 3PL to another, and to try and get our business, the current 3PL supplier agreed to match our current prices, including storage prices.

We were paying £1 per CBM (cubic meter) in storage with our previous supplier, but the new / current supplier dealt in "per item" storage charges, so to roughly get back to the £1 per CMB storage of the previous supplier, I suggested 50p per item (complete unit). This would have been largely the same as our previous supplier on the basis an item was defined as a complete unit. Based on 50p per carton we're paying around £2.86 per CBM, which we would never have agreed to and clearly doesn't match our previous storage costs.

In addition to this, the contract / SLA refers to complete products and multiple cartons in the First Item section (mattress and headboard, divan set), which heavily implies that an item is a complete unit and sometimes a set of units.

We started working with this supplier in December 2015 and have previously paid invoices in good faith. We highlighted this issue about a month ago after looking into the excessive storage charges properly and realising that they have been charging on a per carton basis. There are currently some outstanding unpaid invoices.

We have tried to negotiate with them and we are now in a position where they have agreed to change ongoing storage charges to £1.50 per CBM (which we will accept) but they will not provide a credit note for any invoices already issued - whether paid or unpaid. The amounts in dispute are £677 for paid invoices and £2,342 for unpaid invoices (see attached workings).

We recognise it will be hard to receive credit for anything that we have already paid, and given the low amount of £677 it is probably worth just forgetting about this (unless you advise otherwise), however we are clearly in a much stronger position for the invoices that we have not paid. What we would like to do is pay the invoices less the disputed storage amounts for each one. What we would like to know is:

1) How strong is our legal position for doing this? Worst case if they took us to court how do you think it would be ruled?
2) What other consequences could this mean for us and what recourse would we have for this? Could they refuse to do any more deliveries and not allow us to collect our furniture? Could they attempt to sell our furniture themselves and take the money?

We would like to know how strong our legal position is before pursuing this further and also gain your advice as to what you think we should do.

Our main points are that:


· The intention of the pricing was to match our previous pricing agreement which clearly has not happened. This can be demonstrated through email correspondence.

· Item is not clearly defined in the agreement, and when it is mentioned it refers to complete units (see screenshot, slide 7 of the SLA)

Please could you provide a quote for your advice on our legal case for disputing these charges? I've attached the SLA and key email correspondence showing the intention behind the storage pricing and also the workings for the storage dispute. If you need any further info (such as more detailed email exchanges) please let me know.
Extra notes: