Commercial Law

Commercial contracts, whether with suppliers or customers, should protect your commercial interests. But getting bogged down in the legal small print can be daunting and take your focus away from the commercial terms.

We work as an extension to your team, understanding your business and providing responsive, tailored advice on commercial matters, giving you peace of mind and ensuring you are protected and not exposed to unreasonable or unnecessary risk.

Our experienced teams based in Stoke-on-Trent, Birmingham and Altrincham, Cheshire, love nothing more than getting into the detail of a wide range of commercial matters.

If you feel weighed down by commercial contracts and agreements, call me for a chat about how we can work with you to protect your business and support it to succeed.

Nick Phillips
Managing Partner

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General Commercial Agreements

Contracts are vital for ensuring your business receives what it expects from a transaction and is protected if you or the other party are unable to deliver. But all too often businesses enter into contracts with little attention to the terms or their effect. Dependent on the circumstances, the law may require, prohibit or imply the inclusion of certain terms and failure to appreciate this could have very serious consequences.

Even when contract terms presented to you by another party are reviewed, it may not always be obvious what has been omitted, the meaning or effect of certain terms or how a particular provision would differ if drafted from your perspective.

Our commercial lawyers can help by preparing contracts or terms which deliver your objectives or by reviewing, advising on and negotiating terms presented by other parties.

Terms of Business (Sale or Purchase)

Whether your business sells products or services, it is important to have terms and conditions of sale in place.

Terms of sale are important for determining what your business is required to provide, ensuring that you get paid and for limiting your business’s liability when things go wrong.

No two businesses have the same issues, sales documentation or procedures. As a result, it’s important to ensure that your terms are incorporated into your contracts and are effective. It is wise to have terms tailored specifically to your own business and not to rely on generic terms.

Manufacturing or Supply Agreements

For high value or long-term contracts, it is advisable to put in place bespoke agreements to determine what is to be supplied and the allocation of risks and responsibilities between the parties. Issues may arise with specifications, volumes or prices of goods or in connection with the ownership and use of tooling or intellectual property rights.

If you are a supplier to a much larger company, the larger company will probably use its own standard documentation and might suggest that there is little or no scope for negotiation. However, it is rare that sensible protection for a good supplier cannot be agreed even with the biggest accounts and it can prove very worthwhile to pursue this.

Our commercial lawyers are skilled in drafting, reviewing and negotiating supply agreements of all types and have a keen interest in supporting the manufacturing, industrial and engineering sectors.

International Trade and Export Sales

When supplying customers in other territories, there are some factors which may require different treatment to domestic sales, for example, arrangements for the transportation of goods and the method, terms and currency of payment.

Incoterms, which set out various options for terms for the international supply of goods, are commonly used. However it is important to make sure the terms selected are not inconsistent with your standard terms of sale. International sales are often conducted through intermediaries by means of agency and distribution agreements both of which can be useful in appropriate circumstances.

Agency and distribution agreements

In a typical agency agreement a customer contracts with the supplier and the agent is not a party to the sale of goods but receives a commission on the price. A distributor purchases goods and resells them for a margin on his own account and at his own risk.

In either case, an important factor is whether the intermediary acts solely, exclusively or non-exclusively for the supplier. Other legal issues to be aware of include the fact that a duty of good faith will be implied into a contract with an agent and, in relation to EU-based agents, a right, in most circumstances, for the agent to receive compensation on termination of the agency.

Outsourcing Agreements

Outsourcing, where there is a transfer of a business process or service to a supplier gives rise to a number of risks that need to be addressed in the outsourcing agreement.

In particular, it is likely that employees involved in delivering the service will transfer under TUPE. To ensure that the supplier delivers what is required, the agreement is also likely to include service level and other quality assurance provisions. It is important to consider what happens to any assets of the parties involved, including intellectual property rights, and what happens at the end of the agreement.

IT/Software Agreements

Where any significant investment is being made in acquiring, developing or licensing IT, it is important to consider how your interests can best be protected and exactly what is required from the other party.

Principal considerations include the ownership of the intellectual property rights involved and issues arising from this, the specification for what is to be delivered and the nature of any ongoing support or protections required.

E-commerce

E-commerce and online selling have revolutionised the way we buy goods. Online sales to consumers, in particular, are highly regulated and it is essential for businesses to understand and comply with the law setting out what must and must not be included in the terms of sale.

Companies that sell online should also have terms of use for their website, a bespoke privacy policy that complies with the GDPR and publishes specified basic details about the company on their website.

Before making any significant investment in a website, it is advisable to ensure that the business will own the necessary rights in relation to copyright in both the website and in any content uploaded to the site. You should also consider other intellectual property rights involved, for example in relation to any trademarks or logos belonging to others that might appear on the site.

Joint Ventures

Joint Ventures most commonly take the form of a corporate joint venture where the parties participating set up a separate entity owned and controlled between them. They can also take the form of a contractual joint venture or collaboration agreement where the parties enter into a contract setting out what they will each agree to do or contribute to the joint venture project without the use of any separate entity. Care needs to be taken in relation to contractual joint ventures to avoid falling foul of competition or anti-trust law and to avoid inadvertently creating a partnership or agency and assuming liability for the other party’s debts or obligations.

Confidentiality or Non-Disclosure Agreements

Confidentiality or non-disclosure agreements are used in a range of different circumstances. It is crucial in each case to consider how the confidential information to be protected is defined and the permitted uses of that information. A lack of consideration of these points can entirely defeat the purpose of the agreement.

Data Protection and the GDPR

The General Data Protection Regulation (GDPR) sets the standards for processing personal data in the EU. It was incorporated into UK law by the introduction of the Data Protection Act 2018. The regime strengthens the rights of individuals, increases the enforcement powers of supervisory authorities (such as the Information Commissioner’s Office) and imposes obligations on organisations which process personal data.

Franchise Agreements

In its commonest forms, franchising is a means of licensing the use of a proven business method.  A business method cannot be protected against copying or by registration in the way that intellectual property rights can.

A franchisor must instead put in place documentation to maximise the protections which are available in respect of trademarks, copyright in manuals and materials, confidential information and trade secrets and by means of restrictive covenants intended to prevent franchisees from using the methods and knowledge they have gained in competition with the franchise after the franchise ends.

Advertising and Promotions

There is a body of law and codes around advertising and promotions and the consequences of failing to heed these can be severe.

The regulations protect consumers from unfair practices and consumers and businesses from misleading marketing. There is specific legislation also relating to food, health products, tobacco, financial services and connected to advertising to particular groups, for example, children.

Advertisers also need to be aware of the law relating to intellectual property in connection with trademarks and passing off and gambling in connection with promotional prize draws and competitions.