Signing a contract is something most businesses do regularly – with suppliers, customers, landlords, employees and partners. It can be tempting to treat contracts as a formality, particularly when a deal feels straightforward or the other party presents their standard terms as non-negotiable. In reality, the small print in a commercial contract can have significant consequences if things go wrong.
Here we look at when it is worth getting a solicitor to review a commercial contract before you sign – and what to watch out for.
What can go wrong without legal advice?
Commercial contracts are written to protect the interests of the party who drafted them. Standard terms and conditions from a supplier or customer are designed to favour that party, not you. Common issues that legal review can identify include:
- Unfair limitation of liability clauses – these can cap the amount you can recover in a dispute at a level that does not reflect your actual losses
- Automatic renewal terms – contracts that roll over automatically for lengthy periods unless cancelled within a specific notice window
- Unrealistic payment terms – obligations that could put pressure on your cash flow
- Intellectual property ownership – particularly relevant for creative, technology or consultancy businesses where ownership of work product may not be clearly defined
- Termination provisions – conditions under which the other party can end the contract, which may give them more flexibility than you realise
- Dispute resolution clauses – specifying which court has jurisdiction, which can matter significantly if the other party is based abroad
When should you always get a solicitor involved?
When the contract is high value. If the contract represents a significant proportion of your turnover or involves a substantial financial commitment, the cost of legal advice is likely to be a fraction of the potential exposure if something goes wrong.
When you are entering a long-term arrangement. A contract that ties you in for several years – whether a lease, a supply agreement or a services contract – deserves careful scrutiny before you commit.
When you are signing the other party’s standard terms. Their terms are written for their benefit. A solicitor can identify clauses that put you at a disadvantage and advise on whether they are negotiable.
When the contract is complex or unfamiliar. If a contract covers territory you have not dealt with before – international trade, licensing of intellectual property, a joint venture – specialist advice is worthwhile.
When you are buying or selling a business. Sale and purchase agreements are among the most complex commercial documents you will encounter. Legal advice at every stage of this process is essential.
Can a solicitor help negotiate contract terms?
Yes – and this is often where legal advice adds the most value. Many businesses assume that standard terms are fixed and non-negotiable. In practice, suppliers and customers will often agree to reasonable amendments, particularly if you are a valued customer or the contract is significant to them.
A solicitor experienced in commercial contracts can identify which terms carry the most risk, advise on what a reasonable position looks like and help you negotiate amendments that better protect your interests.
What about contracts I have already signed?
If you are already party to a contract and a dispute has arisen, or you are concerned about a clause that is being invoked against you, a solicitor can advise on your position and your options. Contracts are not always as clear-cut as they appear – ambiguous drafting, implied terms and the wider context of the commercial relationship can all be relevant.
Even if you have signed unfavourable terms, early legal advice can help you understand the realistic risk and the most cost-effective way to manage it.
Speak to Oxford business law solicitors
At Challenor Gardiner we advise businesses across Oxford and the surrounding area on commercial contracts, from reviewing standard terms to drafting bespoke agreements and advising on disputes. We offer practical, cost-conscious advice with no unnecessary jargon.
Call us on 01865 721451, email info@challenor-gardiner.co.uk or contact us online.
