5 Reasons to Review Your Existing Commercial Contracts
Are you ready to do some serious spring cleaning? We’re not talking about updating your wardrobe or changing the office wallpaper! With big changes ahead, like GDPR and Brexit – it’s the perfect time to review and update your commercial contracts. Below we explore why regular review of existing contracts matters, and how to begin.
What are Your Commercial Contacts?
Your ‘commercial contracts’ are the legally binding agreements between you and your customers, suppliers or business partners. These can be written or verbal, and include everything from your terms of business with customers to the property lease and shareholders agreements. The range and complexity of commercial contracts means the review process can seem daunting. Yet, reviewing existing contracts is vital for business growth and success.
Why It’s Important to Review Your Commercial Contracts
1. Maintain Legal Compliance
A lot may have changed since your business contracts were originally signed – including the law! So it’s important to review and update your commercial contracts regularly. This ensures that all terms are still legally enforceable. Fail to comply with certain legislation and you risk damage to your reputation, hefty fines or even business closure.
There’s no time like the present! In April 2018, changes to employment law come into effect, including increases to ‘auto enrolment contributions’, and GDPR is just around the corner. This means reviewing your existing contracts is especially relevant right now.
The UK’s Information Commissioner’s Office agrees, saying: “Any contracts in place on 25 May 2018 will need to meet GDPR requirements.” You should check your existing contracts to make sure they are compliant and if not, have them amended. Also, remember to review all contract templates you use. Find out more about GDPR here.
2. Adapt to Changing Business Needs
It’s not just the law that changes. In today’s technology-driven economy, businesses evolve rapidly to meet customers’ growing expectations.
Yet many business’ commercial contracts are signed, filed and often forgotten. This means the business documents become out-of-date and meaningless. The business’ interests are no longer legally protected and the contracts may contain legal issues that cost the business money! Don’t let this happen to you. Update your legal documents to reflect how your business works now.
This review process ensures your contracts are up-to-date, free of legal weaknesses and consistent with your current operations. All this helps your business flourish within the ever-changing economic and technological landscape.
3. Streamline for Better Customer Engagement
If your customers don’t understand what they’re signing up to, they may take their business elsewhere. So what’s the answer?
Build customer trust by streamlining your contracts to make them clearer and more engaging. Cut out unnecessary jargon, whilst retaining the legal details that protect you and your customers’ interests.
A good place to start is by updating the infamous ‘small print’ – your customer ‘Terms & Conditions’. Transform the ‘Ts & Cs’ into a living document that reflects your current business and customers’ needs. Work with a legal professional to create an accessible contract that customers trust and are happy to sign.
4. Ensure Your Team Understand Their Legal Responsibilities
We’ve established that change is a constant part of life and business; this includes your workforce! Your team may have changed considerably since the business’ commercial contracts were first signed. You may even be new to the company yourself! So make sure your current team understand their legal rights and obligations.
How much each person is required to know will depend on their role. It’s important to ensure everyone who works for the company understands their legal responsibilities and is aware of the key points covered in the commercial contracts.
So, whether you’re a business owner, new company leader or the founder, familiarise yourself with the existing business contracts. This way, you can implement the best training to get your team up-to-speed with the business legalities. This up-skills your employees and protects you as an employer.
5. Be Prepared for Change
Most businesses have a range of legal documents, including everything from equipment licenses to supplier contracts. Some of these contracts may include ‘change clauses’ or ‘break clauses’ that allow you to renegotiate or terminate the contract before it expires.
You can use these clauses if you’re no longer happy with the agreement or service you’re receiving. Therefore, it’s important to familiarise yourself with your existing contracts so you can make changes that benefit your business.
You won’t be able to update all of your commercial contracts immediately; some may include restrictions that prevent you updating the contents until a specific date. Yet, this is no reason to delay the review process! Even if you can’t make changes now, it’s worth familiarising yourself with their contents. This way, when the time does come to update the contracts, you will be ready!
Our Top 3 Tips
Here are our tips to help you start the contract review process.
1. Get Professional Help
You probably know your business inside out, but you may not have legal expertise. Hiring a legal professional to review your commercial contracts takes the stress out of this often daunting process. A commercial lawyer will spot any legal issues lurking within your existing contracts that you might miss.
2. Pick a Specialist
Pick a law firm that specialises in your industry or business focus. For example, Goldstein Legal are commercial lawyers who specialise in franchise, property and employment law. A specialist law firm will be able to understand your specific commercial needs from the start, saving you time and money.
3. Pick a Lawyer who Shares Your Vision
Last but not least, choose a lawyer who understands you! It’s important to hire a law firm that shares your values and understands your goals. For example, if you want to streamline your legal contracts, hire a straight-talking law firm. They will be able to remove unnecessary jargon, whilst maintaining the legal integrity of your contracts.
We’ve revealed the business benefits of reviewing your existing commercial contracts. The review process ensures your contracts remain up-to-date, relevant and legal. Don’t let your legal contracts lurk away in some dark and dusty file. Start the review process now!
We can review, update and streamline your commercial contracts. Contact us for a free consultation.