There is one often-overlooked area vital to secure future business success – formal written contracts for business partners, suppliers and customers.
Setting up a business can be both exciting and nerve wracking in equal measures. However, sensible business owners will look to secure the future of their companies with formal written contracts.
What is a written contract?
Depending on the business need, the written contract may take several forms, for example:
- partnership deed,
- shareholder agreements,
- contracts of employment,
- terms and conditions for sale.
An experienced commercial lawyer will be able to advise on the best written contract suited to your needs.
But what are the potential consequences of not having formal written contracts?
Without a partnership deed the business will be governed by the Partnership Act of 1890. Unfortunately, this piece of legislation was drafted well over 100 years ago and often will not meet the needs of today’s business partnerships.
Anyone going into business together should set out the formalities of their business partnership, such as: obligations and responsibilities, rights and benefits, or what happens if one partner wants to leave the business.
When dealing with suppliers, clients and customers, a written contract will protect your rights, ensure you get paid or receive the services or goods you have paid for, and will limit the commercial risks of doing business.
It’s a common misconception that some people think that a formal contract only exists if it has been written down.
In reality a contract can be made orally, or be proven by your dealings (on the phone, via email, sending text messages etc.) with your customer or supplier. Just because you haven’t signed a written agreement doesn’t mean there isn’t still a formal contract in place.
Given the current financial climate, it may well be the start-up pioneers and entrepreneurs of Britain who will help to pull our economy out of the doldrums. Any sensible business owner can protect their business with experienced legal advice.
Our experienced commercial litigation team at Tallents Solicitors can help any start-up business get off to a flying start by advising on their legal rights, responsibilities and obligations. Let Tallents help you secure your business’s future.