Commercial Business Law

It’s well-established in English law that a contract does not need to be in writing. An agreement can be legally binding because of oral discussions you’ve had, or a contract could be implied because of previous dealings between you and another party. There are some exceptions, for example, share transfer contracts and contracts for the sale of land or intellectual property ownership transfers, should always be in writing. So generally speaking, you don’t need a written contract, but having the terms of your contract formalised is highly advisable – oral or implied agreements can lead to misunderstandings over what was agreed and ultimately can result in expensive and time-consuming legal disputes.

This question often arises in the context of a dispute over contract terms. You offer to enter a contract subject to your terms and conditions. The other contracting party accepts your offer – but on its own standard terms.  The uncertainty these situations cause (sometimes called the ‘battle of the forms’) is one reason why we place such a premium on getting the fundamentals of forming commercial contracts right. If you want your standard terms and conditions to apply to the contract to the exclusion of the other contracting parties’ terms you must ensure your terms are explicitly incorporated into the contract. This is sometimes achieved by ensuring your terms are provided to the other side at each stage of the contracting process. We can also include specific clauses to bolster the chances of your terms having precedence. You should always consider seeking legal advice before agreeing to enter a contract to ensure you understand whose terms apply. You may alternatively wish to agree a specific / bespoke contract between parties to record what has been agreed.

In your desire to reach a potentially lucrative deal for your business it’s crucial not to lose sight of the risk you are taking on when you enter the contract. Always take a step back and consider the possibility that things don’t go according to plan. What happens if for some reason you can’t fulfil your side of the bargain or a dispute about terms arises? Could your business survive the legal claims that might result?

At DMH Stallard we have the expertise to pre-empt scenarios that could damage you commercially by contractually limiting your liability. We also advise on the appropriate due diligence exercises you should carry out before committing to any contract so that you minimise any general risks posed by the proposed agreement. You may also wish to consider insuring against potential claims.

In theory it’s possible to exclude liability entirely for certain risks. But you need to bear in mind that certain liabilities can’t legally be excluded (liability for personal injury caused by your negligence, for example). You must also ensure your contract is within the parameters of legislation relating to unfair terms (for business or consumers, as applicable).  It’s often more sensible to limit or cap liability to a reasonable sum so that you have the benefit of an enforceable cap.

Under data protection laws, whether you are a controller or a processor, you will be required to take certain steps with regard to your contracts.  For example, if you’re a controller, your contract with a processor must contain certain mandatory provisions.

Failure to comply with data protection laws can lead to irreparable reputational damage and heavy fines by the UK regulator the Information Commissioners Office (ICO).

Our also provide in-house training on DPA compliance and related matters to a wide range of businesses. Please see our Data Protection page for further information.

Unlike work that’s carried out by employees, self-employed individuals or freelance contractors normally hold on to ownership of the intellectual property over work you’ve asked them to create, unless there is a written agreement to the contrary, which provides for an assignment of rights. At DMH Stallard we advise businesses on how they can secure intellectual property rights over contractors through bespoke agreements.

Please see our Intellectual Property page for further information.

Depending on the circumstances, it is recommended that you incorporate a service level agreement (SLA) into any overarching IT contract you have.  This can help clarify the service levels for an IT provider (so the customer understands where the limit of the IT provider’s service levels are) or the business receiving the service (to make sure that the service levels are sufficient to meet the needs of their business). The agreement should clearly identify the service being provided and cover key issues such as service response times, service recovery and remedy and maintenance of IT infrastructure. The SLA should also contain detailed provisions to deal with any for lapse or breakdown in the service and may also contain details on how to deal with any failure to provide the agreed level of service.

It’s important to acknowledge that the SLA will not be able to anticipate every eventuality or every day to day request the business might make. For this reason, SLAs should always be realistic in the goals they set and contain a degree of flexibility so that both sides can react appropriately to real word scenarios without breaching or undermining the entire SLA.