Skip to main content

Latest Releases

June 16, 2016

MAKE SURE YOUR COMMERCIAL CONTRACTS WORK FOR YOU! REMEMBER IT’S ALL ABOUT THE SMALL PRINT

Are your T&Cs working for your business? Rhian Osborne Commercial Director of Greenaway Scott shares her advice on ensuring your contracts protect your interests.

Your company’s terms and conditions are more than just a set in stone document thought of as typical for any business dealing in your sector. 

Commercial contracts are very important in making sure your products / services and best interests of your company are protected.

Terms and Conditions of Sale (T&C’s) should be written exactly for your company by a solicitor who will consult with you as to the specific matter.

All too often the team at Greenaway Scott are sent T&C’s from clients that have been created using various versions found on the internet. These contracts usually miss important contractual provisions and may leaving them exposed to financial risks and liabilities they had not predicted.

Getting a good set of T&C’s in place doesn’t cost the earth; but it may if you get it wrong!

Clauses of interest in T&Cs:

Term

Try to ensure that the term of the contract is defined at the outset with a clear renewal method– this may be automatic or “active” meaning. This means one or both of the parties need to act in order to terminate or renew the contract.

This allows you to set your company forecasts based on the length of the agreement as at the date it was signed and when it ought to be renewed.

Renewal may allow you to update terms. You may want to go through a price increase for example.

All Monies Clause – Ownership Of Goods

A Supplier must confirm that ownership of the goods do not pass to the Customer until payment has been received in full for all of the goods and that you have the right to take back possession of the goods should the customer fail to make payment within a certain time period.

Fundamentally sellers should seek to include this clause and buyers be aware of the fact that unless all monies are paid to the seller they may not legally own the goods.

Who is responsible? Insurance, Risk and Liability

Parties to a contract may disagree as to who should bear the risk and liability for the product in question; e.g, as the owner of a product your business will have invested in its creation. If you require the services of another business, which involves management of the product, it may seem obvious to you that the business providing the service should be responsible for the risk and take responsibility for the full replacement value of the product whilst in their possession. This is not true.

Payment

The agreement should always state when payment is due. If you are selling goods or services you should ensure that time for payment is of the essence of the contract. Payment terms are material to the contract allowing you to terminate if the buyer fails to make payment when they were supposed to.

Intellectual Property Rights

Whilst the provider may have access to and use of the owner’s IP rights during the term of the agreement, the contract should be written to state that all IP rights are to remain vested with the owner and should not pass to the provider by virtue of the agreement.

Remember to review and update!

Your Ts&Cs should evolve with the growth of your business;

  • If what you are selling changes
  • If how you are selling changes
  • If you start using altered possibilities of sale
  • If you should get your T&C’s reviewed

The Commercial team at Greenaway Scott is always glad to review any documents prior to signing by clients in order to ensure that they work for the intended purpose and protect you and your business as required. 

To find out more please contact the commercial team at Greenaway Scott by emailing commercial@greenawayscott.com.

This article was first published by Business Insider. Read the full article here.

Return to index