All businesses enter into contracts on a regular basis with customers or suppliers. Contracts are vital for achieving your objectives and for allocating responsibilities and risks.
Your contracts should ensure your business receives what it expects from a transaction and protect you when you or the other party are not in a position to deliver.
For various reasons, however, businesses often enter into contracts with little attention to or awareness of the terms or their effect, whether these are set out in the contract or implied by operation of law.
Contracts are legal documents, so it is vital that you take care to check what you’re signing up to.
Here are some pointers:
- Different circumstances can have a significant bearing on what should or should not be included in your contracts, for example, whether the contract is entered into with another business or with a consumer, with an agent, a partner or a competitor. Dependent on the circumstances the law may either require, prohibit or imply the inclusion of certain terms and failure to appreciate this could have very serious consequences.
- When contract terms are presented to you by another party, make sure you review them carefully, as they are likely to have been drafted from the other party’s perspective rather than yours. It may not always be obvious what has been omitted from a contract, the meaning or effect of certain terms or how a particular provision would differ very significantly if drafted from your perspective.
- The use of archaic language such as ‘hereinbefore’, ‘aforementioned’, ‘notwithstanding’ or ‘indemnify’ may be irritating or amusing depending on your perspective, but if you are in any doubt as to the meaning or effect of terms, always check.
- Don’t assume anything. It is important to ask for clarification on definitions and terms, so that you are sure that your understanding matches that of the other party.
- Get professional help from a commercial solicitor. It is one thing to review the content of your contract, but much trickier to identify things that might be missing. For that you will almost certainly need the help of a commercial solicitor.
For help reviewing or drafting contracts contact our commercial solicitors on 01782 205000 or email firstname.lastname@example.org