What are commercial contracts?
Commercial contracts are business agreements between two or more parties. They may also be called business-to-business agreements, and can include contracts with customers or clients, in which case they may be called ‘consumer contracts’.
There are lots of different types of commercial contracts. For example:
- Client Contracts
- Supplier Contracts
- Sales Agreements
- Purchase Agreements
- Joint Ventures and Partnerships
…to name but a few.
Does a commercial contract have to be in writing?
No, contracts do not have to be in writing to be legally binding. However, if you don’t put the terms down in writing, then it can be difficult to evidence what was actually agreed. So, although a verbal contract is completely binding under English law, it’s clearly much more useful to have a written record of your agreement.
Contracts which are made by email are equally valid. Again, so long as the terms which you have agreed are clear, then there should be no problem enforcing the contract.
Do I need a personally written ‘bespoke’ contract or can I use a template from the internet?
The answer is, it depends. Some agreements are quite standard, such as a simple NDA or Confidentiality Agreement. Others are more complex and need to be written to accurately fit your circumstances. It may be tempting to try to save money by using an ‘off the shelf’ agreement. However, it only takes one mistake in the contract to make the whole thing very costly to deal with. It’s therefore worth spending a little extra to make sure you get it right from the start. It means that you can sleep at night and keep your business on a solid footing.
Is it worth reviewing ‘Standard Terms’ or template contracts provided by the other side?
Although you may be presented with ‘Standard Terms and Conditions’ by a business partner, or even a contract drawn up by their solicitor, it is always worth having the terms reviewed by your lawyer. Firstly, you need to check that the contract terms on offer actually apply to your situation. It is not unheard of that a business may just find an old contract on the internet and try to use it for a situation that doesn’t fit.
Secondly, its important to check for the ‘deal-breakers’. That means, rather than spending hours pouring through each word, your solicitor simply focusses on the main two or three clauses which are likely to cause you a problem. To do this properly, your solicitor will need to understand your business and what you want to get out of this contract.
This way, you can quickly get peace of mind, at an acceptable cost.
What are the main things to look out for in a commercial contract?
The main terms you need to watch out for will obviously depend on the type of contract you’re entering into, and what you want to get out of the transaction. However, there are some terms which are quite likely to be relevant in many commercial contracts.
These include restrictions on liability, intellectual property rights and termination provisions.
If you’re providing good or services, then there’s a chance you can be sued if something goes wrong. Your liability, unless you cover it correctly in the contract, could be unlimited. Sensible provisions to include here would be a liability cap and limits on the type of claims which may be brought.
Intellectual property rights, and who owns them, may well be important areas to cover in your contract. Apart from protecting the existing intellectual property rights of each of the parties, the contract should also deal with what happens to any new intellectual property which is created through the transaction.
Finally, termination provisions can be crucial to be able to exit a contract which is not working. Without the ability to end the contract, a party can find itself tied in, and forced to buy itself out of the agreement – if it doesn’t want to face a claim for breach of contract.
Sectors we work with
We provide services for a number of different sectors including start-ups, property developments, small businesses and more.
Get in touch today
We’re always happy to discuss any new ideas or legal questions you may have. So, feel free to get in touch with us today. Just complete the form below and hit ‘Submit’ or click on the ‘Request Callback’ button and we’ll be delighted to speak with you.
|020 3695 8920|
Why we’re different?
Ray Levy Law Offices is a specialist business law practice.
We don’t do other areas of law (like wills or divorces), we just focus on being experts in our field. That means you get the best business law advice from more than 20 years of experience.
To get this level of specialist legal advice, you would usually have to go to one of those unpleasantly large city law firms (those that have hundreds of lawyers, charge you for breathing and don’t remember your name).
We’re different. We prefer smaller clients, we give you a direct, personal service that’s relevant to you, and we don’t fob you off with a junior lawyer who just came out of law school.
Finally, and quite importantly, we don’t charge you an arm and a leg either. We’re also a small business at the end of the day, and we know what’s reasonable to pay for legal services.
So, get in touch with us today. Just click on the ‘Request Callback’ button below and we’ll be delighted to speak with you.