My word is my bond? Or is it? We take a look into contracts.
12th October 2016 by My word is my bond? Or is it? We take a look into contracts.
Wisdom often comes from experience but (dare I say it?) our elders were not always correct. Man may have been conducting business for centuries, and we have certainly learnt a thing or two during that time, but a few common myths still remain. What can we learn from the sayings of our forefathers when it comes to negotiating and entering into contracts?
My word is my bond.
Whilst verbal agreements are binding under English law they are almost impossible to enforce. There is a reason that we also use the idiom “talk is cheap”. If a dispute arises each party will nearly always remember (or claim to remember) the conversation governing the contract differently, each in their own favour. Without any evidence to support either claim it will come down to who the courts are willing to believe. No matter how honourable the person you are dealing with appears, save yourself the time, expense and heartache of litigation by having a written agreement in place.
I’ll believe it when I see it.
This one is absolutely true! When you draft a contract, make sure it is comprehensive. Even if it seems obvious that the parties would have agreed certain terms, the courts will not fill the gaps within your contract for you. If you want to rely on a promise that has been given, or to make sure that the other side carries out a specific obligation, then include it in the contract. Not only will it reduce the risk of costly legal battles further on down the line, but businesses become far more honest when they have to confirm something in writing. Whilst they may have been happy to agree to a deal in principle, you may find that they seek to caveat it when they’re asked to sign an undertaking to that effect, or that the two parties have not actually come to an agreement at all.
The devil’s in the detail.
In the same way that courts will not write your contract for you, they will not amend it either. Whilst they may consider the commercial intentions of the party, and general business sense, the most important factor will almost always be the everyday interpretation of the actual words as they are set out in the agreement. Make sure your agreement says exactly what you mean in clear and unequivocal wording.
There’s always another way.
You should never sign a contract just because you are told “take it or leave it”, “it’s the best we can do” or “nobody else has ever challenged our terms before”. Others may have signed these terms before you, but that does not mean that it was in their interest to do so. It is surprising how often there is some room for negotiation, especially if you can give valid reasons for your objections.
If it sounds too good to be true, it usually is!
Salesmen offer the world to win a deal, but is there a catch? Read the entire contract and ask yourself if you can (and are willing to) meet the obligations it contains before signing the document. Once you start looking at the fine print you might discover that the best thing to do is to walk away and look elsewhere. If you don’t understand a contract seek legal advice.
If it ain’t broke, don’t fix it.
Contracts should not be amended for the sake of it, but circumstances change. Your requirements may alter, or you may find that you have greater bargaining power than you did before. Even if the relationship hasn’t varied, legislation may well have. The law is an ever-changing beast and your terms may no longer reflect best practice. Review your contracts on a regular basis.
There are dozens of other sayings that could be applied to contractual relationships, but the above should be a good starting point. Of course, if you’re ever in doubt then go to someone who can use the adage “trust me, I’m a lawyer”! Happy negotiating.
For further information on this, or consumer law generally, please speak to Sam Freeman at firstname.lastname@example.org or on 01202 557256.