For this blog, I felt it relevant to go back to the basics. On Tuesday, I went on a commercial contract drafting skills course specifically designed for lawyers. It bought back many memories of my contract law days when studying for my Graduate Diploma in Law and the refresher did me good. It was enjoyable and I felt like I learnt some things from it that will definitely benefit my clients.
As individuals, we enter into legal contracts every day whether that’s by buying our morning coffee, filling our cars with petrol, signing up to gym memberships or entering into a hire purchase agreement for washing machines or other household goods. Often it is overlooked but everything we do where there is an exchange of promises is governed by contract law.
For a contract to be valid there must be an offer, an acceptance, a meeting of the mind/intention to create legal relations and consideration. It is important to remember that you may be entering into contracts without even realising it, however for the purposes of this blog I shall discuss the contracts that are properly drafted, may require a signature and clearly lay out obligations and responsibilities of each party. These are the contracts often seen in business. It is important that you should never sign a contract that you do not understand. Later stating you did not understand the terms will not stop the contract from being legally enforceable. Also remember, a signature is NOT always required to make a contract legally enforceable. This is often a common mistake people make.
When running a business, it is important to read any contracts carefully because they could cost you money. If you agree to a badly-written contract or a contract you have not read properly, you may be signing up to do more than you had bargained for. You may have waivered some rights you end up wishing you could rely on, or you may have allowed the other party to limit their liabilities. It is all ifs buts and maybes but it is better to be fully aware of what you are signing up to than it costing thousands to put right if a problem occurs.
Business owners need various other contracts to protect their interests, manage relationships, and ensure legal compliance. The specific contracts required depend on the type and size of the business, but here are the key contracts most business owners should have:
- Shareholders or Partnership Agreement for businesses with more than 1 owner- Defines roles, responsibilities, ownership stakes, profit sharing, decision-making processes, and exit strategies.
- Terms and Conditions (T&Cs) – This is your contract that you can rely on should a customer want to get out of paying, or try and argue the service was not what they had asked for. This is your business, your cash flow and your terms that need to be protecting.
- Contractor or Freelancer Agreement – Small businesses often use the services of a subcontractor before employing on a permanent basis. These agreements outlines the scope of work, payment terms, deadlines, and intellectual property rights.
- Data Protection – Privacy Policies, or data processing agreements. Any business that processes data need a privacy policy. This document explains how personal data is collected, used, and stored in compliance with data protection laws.
Next Steps?
If you need any more help with a legal contract, speak to BEB. We can write a bespoke business contract to suit your exact needs.
BEB are contract law specialists based in Northampton. We draft bespoke and well written business contracts on a fixed price basis. Our legal packages offer flexibility depending on the number of documents you require. Whether you require a business to consumer or business to business contract we are here to help!
We are contract drafting and contract review providers. We can advise and negotiate all contracts to protect you from unfair terms and conditions as well as support you with any ongoing contractual issues – we would be like your very own comprehensive in-house legal department.
We also offer debt recovery services, relieving you from chasing late payments and improving your cash flow.
If you need any of these legal and contract services get in touch with us today on 01604 217365 or info@bebconsultancy.co.uk
Free Resources
Small Business Owners Guide to Contracts
The Construction Review Checklist
Online Courses