Byline: Nick Carter
The need for tight business contracts is never greater than at times of economic stress.
Companies can face the prospect of enforcing their rights against troubled businesses looking to avoid their own responsibilities.
Sometimes, such rights can involve debt recovery, where vital elements of protection are sound business terms and good credit control backed by rapid recovery action if settlement is not made. But rights and obligations are not confined to debts. The prospects of a business being protected in general are greatly enhanced by sound contracts. For example, purchase contracts should reflect the performance and service level required by the customer and not just standard supplier terms.
A growing business needs to ensure that suppliers of bought in goods and services, and especially major items of plant, formally recognise their obligations.
My advice is to ensure that any critical elements of these arrangements are evidenced in writing even where matters seem to be so straightforward that minimal documentation would suffice.
Whether there is proper documentation or not, early action is vital if a dispute is to be settled satisfactorily. Often, such an approach can lead to issues being resolved without a formal legal process.
If businesses have to go beyond this, there is the option of mediation, which, in my experience, works well, in many cases delivering a fair result at a reasonable cost and without undue delay. Through the economic downturn, I have seen and advised many clients on claims related to professional negligence against professional advisers including lawyers, accountants, surveyors and insurance brokers. …