“How often should a business review its commercial contracts?”
A couple of weeks ago I hosted a Q&A session for the Small Business Network, an online support and networking group for small businesses in England. One of the participants asked how often a business should review its commercial contracts.
A very good question. And one that does not have a definitive answer.
One thing is certain though…Contract management is not only about writing a contract and putting it into practice within your organisation. Contract management is also about the ongoing review and monitoring of your business contracts to ensure they are reflective of the current law, the changing nature of your business and the rights and needs of your customers and clients.
The law is always changing…
Let’s take a business that supplies goods to ordinary consumers, for example your company sells scented candles to Mrs Johnson from Manchester. It is fundamental that your customer terms and conditions demonstrate that you supply your goods in a way that is compliant with the law. Most businesses will be familiar with their required statutory obligations, for example under the Sale of Goods Act 1979. However what some businesses may not know is that there have been recent additions to the law. I talk of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. These regulations replace the previous Distance Selling Regulations and Door Step Selling Regulations. I will not go into much detail about the new regulations in this blog. However for the purposes of the subject at hand, what this highlights is that new laws and regulations are constantly bought into force. This should keep you and your business on your toes and trigger you to review your business contracts. After all, your ultimate objective should be to protect your business whilst also affording your customers the protection which the law prescribes. This will lead to growth in customer confidence in your business, your products or service and your brand.
Of course I do not expect you to always be aware of the changes to the laws and regulations which may consequently have an impact on your business. But this is why you should use the various resources that are around you. Contracts4You works to keep abreast of such changes. We aim to keep our clients kept up to date via various platforms including Facebook, Twitter and Google Plus. You may hear about changes in the law on the news and want to learn more about the detail and the implications it has for your business. Ask us and we will kindly look into it further for you.
Your business may be changing…
Businesses are constantly changing. Changes in the way you run your business and its operations, or changes to the products and services you provide, may require you to revise your business contracts.
For example you may be switching the courier you use to deliver your goods to customers. Or you may be extending your product and service range. Or you may have new third party contractors you work with to deliver your service. These types of changes should prompt you to ask the question as to whether you need to review your business contracts.
What about business to business contracts?
Business to business contracts (commercial contracts) should be treated slightly more differently to consumer contracts, especially once both parties to the contract have agreed the terms of the contract and signed it.
A commercial contract may require changes in a number of circumstances, for example where there are changes to law and regulation, or where one of the businesses are going through internal structural changes.
Simple conversations and negotiations with the other party may lead to agreement to change the terms of the contract. However it is important that you seek specialist advice and support when wanting to look at changing terms of a commercial contract and doing it in the proper legal manner. Contracts4You specialises in looking at existing commercial contracts and advising on how to go about making changes to them in the correct way.
Barriers to change…
From my experience there are several reasons why businesses do not review their business contracts as often as they should, or sometimes not at all.
- Costs – Businesses are often put off by the high quotes they receive from legal service providers.
Solution – Contracts4You caters for SMEs at a very competitive rate. We provide an initial free consultation to understand your business and its needs, and then we provide a packaged quote helping you to budget accordingly. We do not charge on an hourly basis like most other providers.
- Time – Businesses tend to focus their time on getting results, selling their products and services and growing their business.
Solution – Contracts4You understands that lack of time prevents businesses from reviewing their contracts. We take the hassle away from you by looking at your existing contracts and working with you to improve them if required.
- Lack of expertise – Businesses may not feel confident in making changes to their business contracts and may not be well versed in changes to laws and regulation relevant to them.
Solution – Contracts4You are contract law specialists with the experience of looking at business contracts. We keep abreast of developments in law and regulation and reflect our knowledge in the service we provide to you.
- Failure to see the importance – To be frank, businesses sometimes do not see the need to review their business contracts and amend as required. This can lead to non-compliance with the law and also to loss of money and reputation.
Solution – Contracts4You will be honest with you. We will look at your existing contracts and if they require changes we will tell you. If they don’t then again we will tell you.
So how often should I review our business’ commercial contracts?
So as I said from the outset there is no definitive answer as to when you should review your business contracts. But I hope this article has opened your eyes to the need to review your contracts as often as possible and to use the resources available around you to do so.
© Contracts4You, ‘How often should a business review its commercial contracts?’, 2015. Contracts4You retains the copyright and all intellectual property rights in the contents of this blog. Unauthorised use and/or duplication of the contents of this blog without express and written permission from Contracts4You is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Contracts4You with appropriate and specific direction to the original content by way of web links.