Your Guide to Commercial Contracts in The UK

Business-to-business transactions are some of the most important ones that exist in commercial spaces.  Although it might not be something that we think of often as new business owners or the creator of a startup, we quickly find out just how big of a deal that it is through experience.  Trying to get inventory or even the materials to create our goods is often quite difficult without these sorts of deals.

Of course, at first, it might not seem super necessary.  Perhaps you’re able to make small purchases of materials or even equipment before you start to need to expand. However, eventually you’ll get to a point where commercial contracts are going to be pretty integral to your operations.  If you want to be better prepared for that point (or if you’re already there), then this is the article for you.

What is a Commercial Contract?

As was somewhat hinted at above, a commercial contract is an agreement between one business and another.  Typically, it will involve some sort of exchange of goods and services, but this isn’t necessarily always the case.  What matters is that both parties will be in agreement to the terms withing, so you should always be sure to read it over closely.

For anyone entirely unfamiliar with how they work, you may want to Click for more info if you’re curious about some of the legal-ese.  While it can be kind of complicated sometimes, it’s usually worth at least checking out.  That way, you can get an idea of what to expect when you decide to go through with one of these contracts.

Thankfully, there are ways to get assistance with that if you’re ever feeling uncertain.  Law professionals (attorneys and solicitors) can read through any potential contracts for you to see if there are any hidden clauses or other things that might raise some alarms for eithver party.  This isn’t required, of course, but something that might be useful to at least keep in mind.

What Might Commercial Agreements Look Like?

No two will be exactly the same, nor will they have the same purpose.  However, there are a few things that you can be confident about suggesting a commercial contract for.  One common example is of a joint venture – in that case, both parties will be agreeing to split the profits in a certain way, etc.

Shareholders typically also have these sorts of agreements, although that might happen slightly less often.  It’s at least recommended to do so with your shareholders so that there is some written text that explains the relationship there.  That way, if there are ever any conflicts, it won’t be as difficult to parse out.

Any time that you hire an employee, that’s going to be a commercial contract with that person.  While that might sound a bit strange, you can read about why that is here: https://www.upcounsel.com/commercial-agreement.  While they aren’t necessarily another business, it’s still something that you’ll need to have to protect yourself and to ensure their protection as well.

What Else Should You Know?

As was mentioned, there’s a whole lot of stuff to unpack in relation to what these contracts are and how they’ll end up working.  However, there are a few things that you might want to prioritize remembering over the rest.  First, let’s take a look at what should be included in one.

You’ll want to think about it this way: a contract between two parties, be they businesses or otherwise, should establish what each wants clearly and concisely.  That way, there won’t be any potential miscommunications as a result of uncertainty in that department.  Additionally, there are a few things to consider in terms of the diction that you use.

A lot of them will contain specific clauses and language such as “good faith” or “best endeavors.”  When in doubt, that’s probably going to be something to talk to your solicitor about.  That way, you’ll know that you have safeties in places where something to go wrong and a dispute to crop up.

Now, there is not exactly a requirement for these agreements to be in writing.  Because of that, some businesses opt to not go that route.  However, just bear in mind that this comes with a significantly higher risk of something falling through.  That’s because there is no physical evidence of what was agreed upon, so it will be harder to argue should there need to be a court case surrounding it.

Of course, the ideal is that we don’t have to deal with a court case at all.  Unfortunately, sometimes these things do happen.  That’s why it’s usually better to prepare for the worst in the first place.  If nothing goes wrong then there is no harm, no foul.  But, on the off chance that it does, at least you will have protected yourself and prepared for that circumstance.

As far as other things to note go, you’ll want to take note of the fact that a lot of personal information will need to be included in the documents on both sides.  That might include anything from email addresses to physical mailbox addresses and the like.  Thankfully, this isn’t typically going to be the main concern at hand, but if you prefer privacy, then it might be a bit troublesome.

Additionally, just ensure that you’re getting legal counsel throughout the process if you aren’t really sure how it all works.  Without that sort of assistance, it can be really easy to end up agreeing to something without fully understanding what has been included in the contract itself.  Sometimes, that sort of thing will be taken advantage of, and you could be locked into something quite unideal.

While this doesn’t happen often, again, it’s just generally a good idea to be prepared just in case.  So, don’t hesitate to talk to a solicitor about your concerns.  Here in the UK, there are a ton of options for you, so hopefully you can find one that suits your needs.