How to protect your business.

There are various ways in which you can protect and safeguard your business but one of the most important ones is ensuring that you have a legally binding agreement between you and your customer or Client. These documents can come in various formats such as Terms and Conditions, Contracts for Goods and Services, Lease or Hire Agreements, Distribution Agreements etc.

The benefit of having such a document in place is that it sets out the legal relationship between the parties. Without being exhaustive the document will cover essential elements such as:

  • Payment terms – are these payable in full or staged payments;
  • Limitation of Liability – this covers what your potential maximum liability is if things go wrong and also states what you aren’t liable for;
  • Termination – this outlines how the parties can exit the contract and what the consequences are of doing so;
  • Confidentiality – this covers what information is kept confidential and for how long;
  • Title and Risk – this covers the legal ownership of any products, goods and materials which pass between the parties and when the Client takes legal ownership;
  • GDPR – particularly important if the other party is a consumer as this will set out how you can use and will ,look after their personal information.

 

It is essential that any company that provides goods and/or services has a bespoke document in place to cover what they supply and afford them the maximum protection. This way you will ensure that you have a fit for purpose document.

Another benefit of having such a document is that it provides your customer or client with protection and also gives them confidence that they are engaging with a professional company.

It is essential that you obtain express authority from your customer or client to the contract by way of a signature or other form such as a tick box or formal agreement in writing. Without express acceptance from the other party, the agreement will not be binding.

Before engaging into a formal contract though, there are a number of things which you can do to safeguard your business bye giving you the best possible chance of only being on a contract with the quality of client which you would like. Ensure you carry out due diligence on the other party. There are a number of ‘free’ ways you can do this such as checking them on Companies House or other websites such as Company Check, which are both free. You can also dig a little bit deeper by obtaining credit checks and company accounts and reports, if you wish to do so. The main thing is do not just take the other party at face value. A few background checks can save you a lot of hassle further down the line.

Having a contract in place is an essential investment for any provider of goods and/or services and will particularly come into effect if you are unfortunate enough to have a dispute with a client or one that doesn’t wish to pay. These are common things for businesses which can be prevented or kept to a minimum by having the right legal document in place to protect you.

If you have an accountant, they should be your first stop for business advice. If you don’t have an accountant or they can’t help, BuBul has a wide range of experts available. For more advice on contracts, contact our expert* Michael (MichaelLong@mjllaw.co.uk).

*We’ve picked experts we know and trust who are good at what they do. All of them will give you at least an extra 30 minutes free advice if you contact them and would then charge their normal prices. They don’t pay to be on BuBul and don’t give us any money from anything they earn as an expert.