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Home » Awareness » Managing contracts » Forming the contractual relationship


Forming the contractual relationship

When is the contractual relationship in place? For a contract to be formed an offer must be accepted without qualification. If you make an offer and the customer comes back and says ‘ok but instead of x can I have x plus y’ or any aspect of the offer is varied, that becomes a counter-offer and no contract is formed unless or until the original offeror accepts the change. If you quote subject to your terms and conditions and the quote is accepted subject to the customer’s conditions, again no contract is formed until you accept the new basis. It is also quite common for an offer to be made and for there then to be discussion or negotiation around some aspects of the job. New terms and conditions introduced through negotiation in effect amount to a series of counter offers to the original offer.

In order to avoid any later difference in perception of the details of the contract or on what terms and conditions it has been created, you should always try to have the last word. Send out an order confirmation or letter of engagement after the customer and you have agreed all the details and in this you set out the finally agreed version . Play back the whole description of what is to be done, when, for how much – indeed everything about the contract. By all means incorporate as annexures other documents which you are content be included – such as program plans, specifications etc – but enclose copes or describe them comprehensively so that there is no room for later doubt as to the document or version thereof. And don’t just enclose a copy of your terms and conditions. For them or any document to be part of the contract they have to be incorporated. So your order confirmation or letter of engagement should reiterate the application of your terms and conditions, say that the contract or agreement is subject to your standard terms and conditions  “... a copy of which is attached”.

Oh, and do check that the terms and conditions are actually attached ..................... .

Nothing in this awareness article is intended as legal advice. If you have a specific legal requirement or query you should consult a solicitor directly.