Importance of Checking or Reviewing Commercial Contracts

Whether you are a one man band or? a large business checking or reviewing contracts is an important part of any business. English law is clear that if you sign something you are responsible for it, but it is also clear that if you start work under a set of Terms and Conditions sent to you then the Ts & Cs sent prevail; “Oh but I never signed anything” is not a legal Tenet recognised under English law.

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Commercial contracts are the cement that binds business together. Having an agreement in writing is not just important, it is crucial, but remember an email saying confirmation of acceptance is also a binding contract.. The primary purpose of written terms is to provide a clear framework as to how a commercial relationship will work.

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Agreements that form a legally binding contract but poorly drafted with vague conditions, may lead to uncertainty and require dispute resolution, even the potential of a costly legal action.

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A well-constructed commercial contract will seek to balance the risks from the relationship and clarify the obligations and deliverables on each party and well drafted contracts that include specific clauses and ways of working will preclude disputes. Everybody should seek to understand their liabilities? in a commercial agreement, but it is sensible to recognise that in contract law, the other party may be doing the same thing!

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Even under ideal circumstances, minor breaches of law can occur, especially if the contract spans many years. Most of these can be remedied with a quick discussion between the parties.

Having your contracts reviewed by is an important step to ensure that your interests are protected.

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Herer are the types of breach which can occur.

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Minor, Material, Fundamental and Anticipatory breach

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A minor breach of a commercial contract has little or no impact on the outcome of the agreement. For example, when you order online groceries, the driver will often have a list of substitutes because certain products you requested were not available. Technically, this is a breach of contract, but there is no loss as the alternatives are the same product but a different brand.

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A material breach will have a detrimental effect on a project’s outcome and the injured party would not have entered into the agreement if they had known such a breach would occur. The remedy for a material breach is normally damages.

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A fundamental breach goes right to the heart of the agreement and presents a clear break in terms of the agreement. The injured party can seek to terminate the contract under the law.

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An anticipatory breach refer to situations where one party tells the other they cannot perform all or part of commercial contracts. The non-performing party can be liable for damages.