Effective contracting for businesses

Businesses which are aware of the implications of contract law can use it to enhance and also protect their own position.

In this article, Paul Longland, who recently joined Frettens after 30 years as partner at another long-established local corporate law firm, outlines his tips for effective contracting. Working out what’s needed

It is surprising how many businesses are reliant on a key product, client, customer or supplier but have no written contractual arrangements in place with the person or company involved.

At least a contract with a notice period will give a grace period if the worst happens.

Incorporating terms

Where you have a contract, make sure it is actually incorporated in the terms on which you deal with the other party. Otherwise, some types of contracts cannot be enforced.

• It’s beneficial to have a clear statement in writing of what has been agreed

• All parties agreeing and signing before work begins is preferable

• Make sure terms and conditions are supplied to customers before any order is placed

• On a website, make sure that any terms posted are clearly indicated and acknowledged when the order is placed

Basic terms

Any contract should:

• Record the commercial deal which has been reached

• Include a clear and unambiguous description of who does what and when

• Include a clear statement of what:

• the contract provides for

• timescales apply

• the guarantees and quality standards will be

• how goods or services will be paid for

Business protection

Next, consider what additional terms can be included in order to enhance the contractual and therefore legal position of the parties – and help to protect their businesses. Appropriate inclusions depend on the importance and value of the contract from the point of view of both parties. I’ve put together a checklist, which is too long for this article, but can be read at www.frettens. co.uk/site/business-services/businesscontracts/business_protection_terms/ Finally, how are variations to the contract going to be dealt with?

I recommend that:

• Any agreed variations are clearly recorded

• Variations are costed out and then incorporated into the price to be paid

• Any further amendments and additions are incorporated into contract addendums so that the whole history is recorded and agreed

My advice

Paul Longland said: “In my experience, those businesses which give priority to having in place effective and modern contract terms, which can protect the interests of the business itself, appear more professional and gain respect from the organisations they deal with.

“When things go wrong or threaten to go wrong, the work carried out on contract arrangements can prove decisive.”

Special business contract solicitors in Dorset

If you have any questions following this article, or would like some tailored advice on your business’ contracts, please don’t hesitate to get in touch with the Frettens team. For a free consultation call 01202 499255. www.frettens.co.uk