Importance of Written Contracts
A nod and a wink (and a handshake!) is as good as a written agreement...or is it?
The importance of written contracts
Whilst many business relationships and commercial transactions are conducted without any formal documentation in place and the expense of instructing lawyers to act for you can be daunting, there are good reasons to consider putting written agreements into place with both your customers and your suppliers - even if you have existing relationships with them that have run smoothly to date.
At its most basic, a written contract ensures you get paid, don't give away rights that you mean to keep and limits the risks of doing business.
It is often only in the event that a dispute arises that people reach for the contracts they have entered into to see what they say or start to wish that they had put written contracts into place. Unfortunately, by this time it is often too late!
Whether or not a written agreement is signed or accepted by the parties to a business transaction, there may still be a contract in place - i.e., an agreement between two or more parties which the law will enforce. When problems arise, it is often where there is a verbal agreement (or a handshake) as, in the event of a dispute, each party's view of what the ‘informal agreement' was is often very different and very difficult to prove.
It follows that without the certainty that a professionally drafted or negotiated document provides, both sides to a dispute usually believe that they are in the right. So, you risk failing to receive what you are rightly entitled to (be that payment from your customers or services or materials from your suppliers) or (perhaps worse) having to resort to the lengthy and costly process of litigation to enforce your rights.
A properly drafted contract will clearly set out who is to do what and when, and therefore avoids the uncertainty that arises when there is either no agreement or a poorly prepared agreement.
As such, using carefully considered agreements will allow you to benefit from the certainty of knowing what you need to deliver in order to be entitled to payment from your customers, and what you are entitled to receive for the money that you pay to your suppliers.
How we can help
We have years of experience in drafting a wide range of commercial contracts for business of all sizes - governing our clients' relationships with their customers, their suppliers and their partners. We can help you whether your business is with consumers or with other companies. We can protect you whether the transactions are conducted face to face or remotely via the telephone or online. Often, we can produce contracts for a fixed price agreed in advance, so that you can be sure of the fees that you will be paying.
We can also review documents that the people that you do business with are asking you sign, to identify what the risks would be in signing up to such terms and to ensure that you get what you want out of the relationship.
Don't leave it until it's too late - the cost of litigation is far greater than the cost of a contract!
© Waterfront Solicitors LLP 2006