Business Contracts
BUSINESS CONTRACTS SWANSEA
Business contracts
A commercial agreement can exist in verbal or written form. For the sake of clarity and to ensure certain agreed terms are complied with, it is advisable to have a clear, written agreement. This makes each party’s rights and responsibilities clear. If any terms have not been complied with then this can be regarded as a breach of the agreement and can be settled either in or out of court. In order to avoid this situation, however, it is best to negotiate an agreement which reflects the best terms for your business.
A contract is only valid if an offer is made and accepted. The parties involved in the agreement must exchange a service for consideration (any amount of money) and intend to be legally bound by this arrangement.
If one of the parties is used to dealing with a certain type of transaction they may have standard terms of business with which they negotiate their terms on. Otherwise they may decide to negotiate their own basic terms and conditions.
The standard clauses that appear in almost every business contract include the price, when payment should be made by, details of the goods or services, and how and when they will be carried out or delivered.
If you are the seller then it is advisable to negotiate a clause about title of ownership. You should retain title until payment is made. This ensures that if the buyer is unable to pay or becomes insolvent you are not without payment and goods.
If payment is late for whatever reason then you may want to mention on what terms interest is to be made. It is worth noting that you cannot impose penalties on the party who is in breach. The interest payable must reflect actual loss.
When it comes to terms relating to limiting your liability for damage or losses caused by your own business you need to be aware of what is and is not valid in law. It is not possible to exclude or limit liability for death or personal injury if cause by your own negligence. In other circumstances you may be able to limit or exclude loss if your limitations are considered by the law as ‘reasonable’. If dealing with consumers the extent of reasonableness will be limited significantly than when dealing with businesses because the law gives consumers extra protection.
Negotiation and seeking professional advice are the keys for getting what you want from a contract. A good negotiator is aware of the points they are willing to be flexible on before discussing the process with the other side.
Many small businesses make the mistake of consulting a lawyer only once they’ve signed an agreement and experience headaches and significant legal fees.