As we enter a new year it is a good time for businesses to start afresh with good practices and a great place to start with this is reviewing commercial contracts.
There are many contracts that businesses will be involved in regardless of the size or nature of the business. Almost all businesses have terms and conditions of trade, whether they sell goods or services, and regardless of the size of the business. Many may not be tailored to the business’ own needs or may be outdated and no longer appropriate for the business to rely on. It is advisable for businesses to have a good understanding of the terms they contract on and regularly review them and update them as necessary.
Terms and conditions which are sent to the client after the contract is formed are of little use, it is important that the terms and conditions are sent to the client and approved prior to the contract being formed. This should be factored into the business’ processes.
Businesses which trade online should have terms of use and privacy policies on the website themselves and their terms of trade should be drafted appropriately to account for distance selling regulations.
In addition to the more frequently seen terms and conditions there are some contracts that are needed in certain circumstances such as outsourcing agreements, distribution agreements and supply agreements. It is tempting to use the same agreement for multiple situations, however it is wise to fully review the terms before entering into them again.
It is common for businesses to have different agreements based upon the way in which they are set up. Companies which have more than one shareholder should have shareholders agreements between the shareholders and the company dealing with how the business is to be run and providing for exits in certain circumstances. Similarly partnerships and limited liability partnerships should have the appropriate partnership agreements in place. Both the businesses and those that run them are in a poor position without such agreements being in place, often having to rely upon the statutory provisions which often does not provide the necessary protections. These agreements should be prioritised in the new year if they are not already in place.
For businesses that do have such agreements, it may be tempting to have these drafted and then never look at them again, particularly the more technical and complex that they are. Businesses and those that run them should review any such agreements that they have in place at least every 2 to 3 years. Small changes in the way a business is run can mean significant changes to such agreements.
For businesses that are just starting out in the new year there are a plethora of different contracts which may be needed. Click here to view our info-gram which gives a useful summary of the contracts which may be needed, from a confidentiality agreement (which is useful when starting discussions with a contracting party) to the contracts themselves.
For any further information about contracts or guidance on them please call us on 0161 696 6170 or complete our online enquiry form and a member of the team will contact you directly.
Comments