Look, we get it. Nobody wakes up in the morning and shouts “I’m going to get my terms and conditions finalised by lawyers today!”. Legal agreements are often seen as dry, expensive and just a tick box exercise so that you can get on with the more exciting and money-making stuff.
The truth, however, is that in this economy, there is very little room for error. One large unpaid debt, a disgruntled employee exploiting a loophole in an employment agreement, an onerous lease agreement – these and other legal scenarios can lead to dire consequences and, in some cases, the collapse of a business.
What are the key commercial agreements every business needs?
Business terms and conditions
Properly worded terms and conditions with both customers and suppliers are critical. Clients need to understand how you do business, what they can expect from you and what you expect from them, and supplier relationships need to be carefully governed to prevent knock on effects from non-performance.
Practical matters like the limitation of liability, the inspection of goods, the protection of intellectual property and the consequence of non-payment must be addressed and vary from business to business. There are also seemingly insignificant standard terms that, forgotten or incorrectly phrased, can cause real difficulties. For example, when and how can an agreement be changed and whether the agreement is being governed by the most appropriate law seem obvious but, unless you know what you are looking for, they can be easy to miss.
Where you are doing business across borders, you need to carefully consider how you will enforce your rights and how you manage payment as this can get very complicated.
Well drafted terms and conditions provide you with the ability to manage your cash cycle - if you aren’t clear with your clients when they need to pay, how they need to pay and what happens when they don’t pay, you may find yourself chasing people for payment and experiencing a severe cash flow crunch.
Key policies
Data protection is one of the most important but misunderstood parts of running a business. Understanding what your obligations are and how you should be dealing with personal data in your business is key. Not only is it important to make sure that you understand your obligations and liability in this area when being asked to sign an agreement by a customer or supplier, but you also need practical and relevant terms to be included in your own agreement.
Internal policies and the training of staff can assist in the smooth handling of subject access requests and a clear understanding of what and what not to do in this arena.
There are other key policies ranging from employment policies, to guides setting out client vetting processes that are critical to the proper running of a business and the mitigation of risks.
Employment Agreements
Your salary bill can represent a significantly large portion of your costs and so it makes sense to ensure the proper management of employment-related matters. The law around restrictive covenants and employee claims and rights can be difficult to navigate. It just doesn’t make sense to play fast and loose with this important aspect of business operations.
Lease Agreements
Often business owners don’t think of a lease in terms of the full liability it imposes. It is not just the monthly rental that a business is taking on – it is the obligation of the full lease period. This can be extremely onerous and understanding whether there is a break clause, whether you have a right to sublet and what your maintenance or repair obligations are critical.
This feels overwhelming - where do I start?
Resist the temptation to copy someone else’s or download a set that looks pretty or was generated from AI. These may not be bad in and off themselves (although copying someone else's material is always a no-no) but if you don’t know what must be in an agreement, how will you know if all your protections have been included?
The answer is to find legal advisors who understand the practical implications of agreements. It is not enough to send a set of standard terms – agreements need to give voice to your business. Even if you are entering into an arrangement where your agreements are not being used, you need to, at the very least, understand your risks before committing to something – no matter how tempting it is.
Wright Hassall is made up of business experts with specialism in key areas of business. As a team we can guide you through the process of prioritising agreements, provide you with key legal advice and help you seize the right opportunities when they come along. Please reach out to us for an initial call to discuss how we can help you.
The information provided in this article is provided for general information purposes only, and does not provide definitive advice. It does not amount to legal or other professional advice and so you should not rely on any information contained here as if it were such advice.
Wright Hassall does not accept any responsibility for any loss which may arise from reliance on any information published here. Definitive advice can only be given with full knowledge of all relevant facts. If you need such advice please contact a member of our professional staff.
The information published across our Knowledge Base is correct at the time of going to press.
