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Whether a new start-up business or an established company, we all need to know the ins and outs of B2B contracts. In this month’s blog, we look at what a business contract means, why they are essential and what you might need to include.

What is a business contract?

Business Contracts are essential to businesses. They protect your company and are a legal contract between two or more business parties relating to its operation, such as the sale of goods, provision of services or partnerships.

Why are business contracts so important?

A business contract will protect you and your business when making a transaction with another business. When a contract is between companies, the usual Consumer Rights Act does not apply, and therefore your business will need some protection against claims. Consequently, it’s essential that a B2B contract is drawn up or checked by a professional lawyer to ensure that you aren’t tied into an unfair contract or terms.

A defined contract can also reduce ambiguity and miscommunication whilst outlining expectations. In addition to protecting against claims, it can also help outline payment terms or agreed dates for work to commence or complete.

What is typically included in B2B contracts?

The following things should always be included when drafting a B2B contract:

  • Details of the companies/people involved, including name, registered company number and contact details.
  • The particulars of the transaction including a description of the product or services, important dates, and contract length.
  • Payment information, including payment due dates and pricing, in detail. It is good practice to include a breakdown and include any price variations.

 How do I make it legally binding?

A contract doesn’t have to be in written form; however, it is always advisable to do this to ensure complete protection.

In English Law, the following needs to be included to ensure a contract is legally binding:

  • Offer – a specific promise forming the basis of the agreement without further negotiation.
  • Acceptance – must be final and communicated to the other party.
  • Consideration – a form of payment regardless of type or amount.
  • Intention to create legal relations – usually presumed in commercial arrangements and proven through signature by both parties for written agreements.
  • Certainty of terms – the agreement is not vague or lacking in essential terms.

The best way to ensure a contract is inclusive and correct is to use an experienced, reputable solicitor. The team at Radshaw Solicitors has extensive knowledge and has worked with various companies of varying sizes, from large organisations to SMEs and start-up businesses.

Our specialist advisors work hard to understand our clients’ requirements and aspire to build long-term relationships. We want to enable you to have a contract that works for you and adds value to your business. We are well-known for providing high-quality, cost-effective advice when preparing and negotiating contracts, so if you need any support, contact us today.