Why written terms matter
Businesses frequently begin working together on the strength of an email exchange and a good relationship. That works until something changes: a delivery is late, a price moves, a key person leaves, or a payment is withheld.
A written contract does not signal distrust. It records the shared understanding at the point when both parties were in agreement, which is exactly the point at which it is easiest to record.
Terms that deserve close attention
- Scope: precisely what is being supplied or performed, and what is excluded.
- Price and payment: amounts, timing, currency, taxes and consequences of late payment.
- Duration and renewal: when the arrangement starts, ends and how it may be extended.
- Termination: on what grounds, with what notice, and what happens to work in progress.
- Liability: what each party is responsible for and any agreed limits.
- Confidentiality and intellectual property: who owns what, and what may be disclosed.
- Dispute resolution: the process the parties will follow before litigation.
- Governing law and forum: which law applies and where disputes are heard.
Common mistakes
- Using a template downloaded from another jurisdiction without adapting it.
- Signing a counterparty's standard terms without reading the liability and termination clauses.
- Leaving the scope of work described in a single sentence.
- Failing to record variations agreed after signature.
- Allowing the contract to be signed by someone without authority to bind the company.
What to do next
Before signing a significant agreement, have it reviewed against your commercial objective. Where you use the same form of agreement repeatedly — supply, service, consultancy — it is usually worth investing once in a properly drafted standard form.