Solicitors in Swansea.

Business Contract FAQs – Swansea solicitors

Can employers opt out of statutory employment standards?

Statutory employment standards such as the minimum wage standard cannot be opted out of.  If you do opt out of certain statutory standards, in the event of a dispute, those standards will be automatically implied into your contract.

However, for certain things, such as the working time regulations, it is possible to opt out so long as your employees give consent and do so free of coercion or pressure.  Junior doctors, for example, often work longer than 48 hours per week and this is possible due to doctors signing an agreement whereby they agree to work longer than allowed for by the working time regulations.

You should bear in mind that statutory standards in other areas of business law, such as those required by the Sale of Goods Act (goods should be of “satisfactory quality”, “as described” and “fit for purpose”), cannot usually be opted out of either.

Can I retain title to goods I have sold up until the point I have received payment?

Yes, it is possible using what’s known as a retention of title clause.  Under ordinary standards of English contract law, ownership of goods is passed at the point of sale e.g. at the time it is delivered.  However, with a retention of title clause, suppliers can specify that ownership of goods passes only when full payment has been received.

Why is it important to draft standard terms of business?

It is a good idea to have standard terms of business drafted with respect to both customers and suppliers.  If you do not have your own terms of business, certain principles of contract law will apply, possibly not in your favour.  For example, under standard contract law principles, ownership of goods passes at the point the customer takes possession of the goods.  You can, however, retain title to goods, using a retention of title clause, until you have received full payment.

What is an unfair contractual clause?

An unfair contractual clause is a clause that is considered unfair to customers.  If a clause is deemed unfair, it will often be null and void.

A good example of an unfair contractual clause is a “penalty clause”.  A penalty clause penalises one party to a contact for failing to fulfil some duty under the contract.  However, a penalty clause will specify a sum of money which cannot be considered “a genuine pre-estimate of loss”.  It is possible to recover your losses through using indemnity clauses.  The big difference between a penalty clause and an indemnity clause is the fact that an indemnity clause requests the payment of a sum of money which can be considered “a genuine pre-estimate of loss”.

The list of unfair contractual terms is very extensive.  Further guidance can be sought by referring to the various pieces of unfair contractual terms legislation, such as the Unfair Terms in Consumer Contracts Regulations 1999.

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