Communicating through your Contracts

Posted 21 March 2016 by Wendy Brighton

Each year in the UK, 520,000 people start a business of their own. It may be for building work, plumbing, providing child care or for design work, sometimes the business is set up out of necessity, sometimes it is a long held dream. For whatever reason it is set up, lots of time, energy and often money is invested into it and so a little care should be taken to protect it.

Small business owners often do not have a great deal of capital to spare for extensive legal advice but there are a few things you can do to ensure that you do get fully paid for the work you have done or service which you have provided. The internet is a great source of information of course but there are some really practical aspects to think about.

Over the years as a litigation lawyer I have been surprised at the number of small business owners who pay very little attention to the need for a written contract. Historically we have had the ‘gentleman’s agreement’ discussing a job, agreeing a price and getting it done on a handshake. There are still circumstances where this works successfully but in general it invites problems.

Whatever service or goods you are providing it is always best to have a document signed by both parties giving as much detail as possible; for the provision of a service, exactly what are you providing- man hours, materials, any other costs. If it involves the employment of other people how many and how much will it cost.

How long will the job reasonably take? Give a time estimate which is able to be adhered to. How often and in what manner are you to be paid? Set it out clearly. If there are any verbal amendments or additions during the implementation of the contract- set them down in writing and get the client to sign those too. This way both parties to the contract know exactly what to expect, and if there is a breach of those terms it is much easier to prove. This will help you if it is necessary to resort to the small claims court to recover your money.

If you are producing or supplying a product be aware that The Sale of Goods Act and the Supply of Goods and Services Act have now been replaced by the Consumer Rights Act. This came into force on 1 October 2015. The Consumer Rights Act has made some changes to rights to return faulty goods and get a refund, replacement or repair. It has simplified the legislation. For the first time a specific timeframe has been created where you can reject a faulty item and get a full refund, within 30 days. A business should be aware of this so as to maintain good client relationships and not to fall unwittingly into legal proceedings. Most of the time client relationships are good and your clients will make payments on time if the details are clearly stipulated in the contract. This makes for good cash flow and a healthy business.

If you have any questions or wish to clarify anything please feel free to get in touch with Wendy at w.brighton@capronandhelliwell.co.uk

This article aims to supply general information but it is not intended to constitute advice. Every effort is made to ensure that any law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek specific advice.

Capron & Helliwell Solicitors offer a range of legal services at the firm’s Stalham and Wroxham offices near North Walsham and Norwich in Norfolk. The firm specialises in areas including family law, conveyancing and private client law including wills and probate. Capron & Helliwell Solicitors offer free family law clinics – please call 01692 581231 for further details or to make an appointment.



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