|
Why bother with contracts?
Why indeed. If your business runs like clockwork all of the time, you never have a disagreement with a customer, supplier or sub-contractor and avoid putting things into writing or signing anything then you could be excused for not 'thinking' about the terms and conditions upon which you trade.
Many competent business people never think about contracts. Others relegate contractual matters to the bottom of their 'things to do' list; they see terms and conditions of business as dull and boring. There are many more exciting things to do in a business than 'waste' ones time poring over terms, conditions and all that legal mumbo jumbo.
But how many businesses really run like clockwork 100% of the time? The expression 'no pain, no gain' holds true for most businesses and a word closely related to pain is risk. If you are not trading on a robust set of terms and conditions of your own then you are likely to be 'at risk.' You may either be contracting upon somebody else's terms and conditions; without any express conditions, in which case you are probably exposed to common law; or maybe not knowing under what terms and conditions you are doing business (the infamous 'battle of the forms').
What is a contract anyway? A contract is an agreement between two parties, which is intended by them to have legal consequences. It does not have to be full of archaic language and impenetrable legalese to be effective; plain English is to be encouraged. A good contract is one that is clear, unambiguous and legally sound. It sets out each party's rights, responsibilities and obligations and says what happens if things go wrong. Most importantly a third party should be able to understand fairly easily what was intended.
To be valid a contract has to meet fulfill certain essential requirements. It cannot be assumed that all 'contracts' are valid. Whilst it makes sense to write things down you can have a perfectly valid oral contract, which is legally binding. Take care.
So what should you do? The first step is to recognize that you may have a problem. Most smaller businesses do not have dedicated legal or contract specialists to manage the contract 'risk' as they cannot justify the overhead. MCC have people available with the requisite skills, knowledge and experience to identify, manage and minimize contractual exposure.
Contact MCC for information on how we may help.
|
|
|
|
|
