Contracts

Business contracts should always be recorded in writing, so there is clarity about the parties' duties and obligations. A verbal agreement is no less binding than a written one, but is more likely to lead to mistaken assumptions or inappropriate expectations, which might blow up into a full-scale dispute. Such disagreements can be disproportionately costly and time consuming to unravel because of the need to first work out what the contract actually said.

If a contract is oral rather than written, then working out its terms involves revisiting the past to recall who said and did what and when. If the parties' memories of the facts do not coincide, then ultimately it is for a court of law to decide what the contract actually said. The court would do this by hearing evidence, and reaching its own conclusions as to whose version of events to believe. This would be an extremely expensive, stressful and time consuming way for the parties to proceed, and even the party that 'won' would end up losing far more than they gained.

For a valid contract to be formed there must be offer, acceptance and consideration (price). Unless all the terms of an offer are accepted in their entirety a purported acceptance is actually, in the eyes of the law, a counter offer. This means there is no contract. Alternatively, the contract is on different terms to those originally proposed. So where two companies each send their own pre-printed terms and conditions by way of offer or acceptance, this "battle of the forms", leads to unexpected outcomes.

Don't allow confusion about what was agreed when, to creep into your business dealings. Instead, make it a rule to record all the important points of your agreement in a letter signed by both of you BEFORE you proceed to perform the contract.

Alternatively, we can assist by drafting appropriate agreements for you, including producing standard contracts. Businesses should ensure they have professionally drafted terms and conditions of business at the earliest opportunity as they will be party to a number of contracts so that the risk of one of them going wrong is a very real one. Having your own terms and conditions also sends the message that you are professional in your approach. By communicating through your terms what is to happen in various circumstances, you actually decrease the possibility of a misunderstanding arising – which is often at the root of disputes. Another benefit of having terms and conditions, is that you can use them to market other products and services that you offer, and which your customer would otherwise not have the opportunity to find out about. For a no obligation quote to draw up your terms and conditions please contact us.