Company and commercial

Terms and conditions

Every business needs effective terms and conditions of business:

  • To ensure that its customers’ expectations and its legal commitments match what it intends to deliver
  • To protect it from claims that are disproportionate to the value of the order
  • To satisfy statutory requirements.

To be effective, these terms need to be written with the business in mind and they need to be used in the right way.

Commercial agreements

Some businesses need trading agreements, such as franchise agreements, distribution agreements or reseller agreements. There may be a temptation to simply sign whatever is offered by the other company, but it will be written to protect them and accepting it without negotiation could prove very expensive – catastrophic even – in the long run.

Articles of association and shareholder agreements

Company shareholders should ensure that the company has bespoke articles which protect their investments and their positions within the business. The model articles which come with a new company from Companies House are not suitable for this purpose.

They may also need a shareholders agreement to complement the articles.

Without these documents, misunderstandings and mismatched expectations are much more likely to result in expensive and destructive disputes.