Commercial contracts form the bedrock of business in Britain. If yours aren’t completely legally sound, it can mean you’re setting your company up for failure.
By getting in touch with a knowledgeable solicitor, such as those who work with First4lawyers, you can be sure your commercial contracts won’t hold you or your business prospects back.
The professionals from First4lawyers can work with you both in reviewing current contracts to ensure they’re rock solid, and in contract talks to help you achieve your aims. Our expert commercial solicitors can provide support and advice designed to help your business thrive and grow.
What is a commercial contract?
A commercial contract is a legally binding agreement between two or more parties relating mostly to a commercial issue.
When is a commercial contract formed?
A contract is formed when the following five basic elements are in place:
Traditionally, the law considers a contract to form when one party makes an offer to another, who then accepts the proposal.
However, the court can overlook this rigid concept in a bid to be more flexible in its approach. It does this by finding that an agreement exists through reasons of fairness, public policy and the intentions of the parties involved in the deal.
Is a verbal agreement binding in legal terms?
Technically, yes. Although verbal contracts are legally enforceable, the court may consider the parties' conduct after a verbal contract is formed as evidence of the contract terms. For this reason, it is wise to draw up the agreement in writing as evidence of the arrangement.
However, there are some situations in which a written contract is required by law as a means of fulfilling specific registration requirements.
Does a written contract need to be signed to be effective?
Technically, no. However, those defending a claim of a contract breach may use the fact that they did not sign the document as proof that they did not agree to its terms. The court may uphold this type of defence unless there is specific evidence to the contrary.
What can be done if a contract has been breached?
A breach of the contractual terms may allow the other party the right to claim damages for any loss it suffers. This is the basic remedy for breach of contract.
There is also ‘specific performance’ which requires the offending party to do something that they haven’t done, but which the contract requires them to do. The courts will usually only order this in cases where it is equitable and just to do so.
An injunction obliges the offending party to undertake (or not undertake) a certain action.
On the other hand, rescission involves setting a contract aside to put the different parties back into the position they were in before making the deal. Rescission may be granted when a contract dispute arises because of:
- Misrepresentation – As a result of fraud, negligence, or lack of knowledge of the facts.
- Mistake – The false belief that certain facts are true when making the contract.
- Duress – This can take the form of threats or coercive conduct.
- Undue influence – This occurs when a party enters into a contract as a result of pressure that falls short of duress.
I want to know where I stand with a commercial contract – what should I do?
Have you entered into a commercial contract but are now in dispute over its terms? Or do you need help drafting or reviewing a commercial contract for your business?
Whatever your needs, the corporate and commercial law solicitors at First4lawyers will look to help however they can. Call us, or complete the Request a Callback form above and we’ll get to back to you.