If you had the opportunity to do business with a well known name what would you do? These are businesses with large marketing budgets to develop a Brand where you like and trust them. However if you are entering a Business contract with them how far should you trust them?
Points to remember:
- Their image of trust is developed for their Consumers not you
- They will know that you are unlikely to pay someone to properly check over any documentation you are sent.
- They will have standard contracts drafted by skilled lawyers that are very much biased in their favour.
- They are highly unlikely to have any sense of being even handed. This is business and they are much bigger and more successful than you are.
There are obviously exceptions to the above but you would be wise to assume the worst and then be delightfully surprised.
I have seen many contracts from large businesses that are on the edge of being legal. They are often resistant to any amendments because ‘that is their contract’. The last such person I argued with had less knowledge and understanding of their own contract than I did because going through it was not what they did.
What to check for:
1. Who the party to the Contract is. Do not assume anything
2. What are the payment terms ? The time for you to be paid will probably be 60 days . The time for you to pay them will be less . Can your business survive such a long delay for payment ?
3. What are the penalties if you are late paying. Most businesses will charge you interest of 8% above base rate once you are late. Large companies will add compensation and costs which if you are finding it hard to pay the original bill make it all even harder.
4. What are delivery terms? When does risk pass? Make sure it is when you receive the goods not before.
5. What Warranty is given? If you deal with Private Individuals you will have to give a warranty whatever to them so make sure the supplier gives you one. If you sell to other businesses they will not be impressed if you cannot give them some warranty about your product.
6. Be careful about them reserving the right to make changes without notice to their Terms of Business- you may not like them and be stuck with them.
Make sure you have all documentation carefully checked by someone who fully understands what it all means. Do not rush to sign . Get your facts then make a measured decision if the contract is right for you and your business. Do not be dazzled by big names.They have power and will use it.
Barkley Legal are happy to go through any documentation and explain it all to you in straightforward language. Please contact us