Contractual Relationships

Commercial Awareness

Commercial awareness is important in helping avoid pitfalls and also in recognising opportunities which arise in business.

Being commercially aware means “being able to appreciate the relationships, processes, risks and costs involved in commercial transactions”.

The most important of these areas is relationships as the viability of a business depends on the success of contractual relationships.

Whilst these contractual relationships ought to run profitably and safely, too often they don’t. Many problems occur due to lack of commercial awareness, which can result in recourse to the courts and expensive legal fees – or business failure.

And on the other side, recognising opportunities to secure and add value to your business is equally important but too often missed.

The Four Phases of Contractual Relationships

Commercial awareness issues arise in many situations. Let’s look at these situations in terms of four phases in the contractual relationships of a business

Pre Trading

There are so many important issues for new businesses to tackle even before they commence trading it is almost inevitable that something will be overlooked which will mean an opportunity missed or a problem stored for the future.

Being aware of issues and addressing them at the outset can enhance both the security and profitability of the business going forward.

See Pre-Trading Articles

What is a Trademark?

It is a sign which identifies the products or services of a business and, may consist of words, slogans, musical compositions, logos, shapes, numerals, colours or any combination of these. It can also include sounds or even smells. In fact a trade mark can be...

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Other people’s copyright

Being aware of and protecting  your own intellectual property rights is important but so is understanding the rights of other people in regard to their material which you may come into contact with. For example, before engaging a web designer, you should check that ...

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Your virtual business

Once you have your website, it is not complete without addressing “the legals”.  Do not expect the web designer to do this for you, or even to raise the subject as most don’t,  maybe they would see it as straying into the remit of lawyers. But terms and conditions of...

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Your Copyright

If your business involves the creation of material which has or may come to have commercial value – for example books, newspaper articles, course materials, sound recordings including CDs, tapes, audio files, films including videos, broadcasts, audio visual files,...

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Copyright: Starting off

To make money you’ve got to sell your goods or services through entering into sales contract relationships. You’ve got to set out your stall and attract interest for such a relationship to happen. You will want a design and logo for your business cards &...

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Domain Names

One of the first things that many business owners will do when starting a new business is choose a domain name. Typically, an online search will be conducted via the registration agent’s website and if the desired domain is free, it is duly acquired. A Google search...

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Infringing another’s trademark

When a new business is started, or when an established company launches a new product or service, it is all too common to overlook the need for comprehensive clearance checks to be carried out on the proposed trademarks. This is...

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Why register a trademark?

A trademark registration is an intangible asset that adds value to a business. Failure to register a trade mark could have negative implications on the value of a business in the event of a business sale. It can also cause problems in the event of any merging,...

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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...

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Getting Business

Making a sale and acquiring new business is crucial to the success. It can be challenging, costly, stressful and exciting. The opportunities seem obvious, the risks less so.

It is all too easy for business people to get carried away with the optimism, urgency and excitement; resulting in unnecessary costs, business lost – or worse – business being obtained on unclear or disadvantageous terms.

See Getting Business Articles

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Collaborative Tendering: the Unsolicited Proposal

The Unsolicited Proposal Sounds like what you might hear at the end of the office Christmas party night…. If ever you have set out a proposal in response to a customer’s requirements as set out in an ITT, it will be possible to appreciate how that written...

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Collaborative Tendering: Part 7

Getting started How to get started with a collaborative bid relationship and how to get from there to the position of working together following a successful contract award. These two questions are uppermost in many minds when the subject of collaborative tendering is...

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Collaborative Tendering: Part 6

Threats to the relationship Having put together an effective team to bid for a tender, discussed all the issues and all signed up to a comprehensive Teaming Agreement, it is nonetheless wise to have an awareness of what to watch out for in the way of threats to the...

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Collaborative Tendering: Part 5

The Teaming Agreement Having discussed in the last article why a Teaming Agreement is a good idea, this article will focus on what issues  a Teaming Agreement might address. Some of the key Teaming Agreement provisions would usually include:- Confidentiality...

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Collaborative Tendering: Part 4

Developing a formal agreement The process of developing a collaboration can be lengthy and fraught with difficulties. From a legal perspective, clearly you will need to have quite detailed discussions with other parties before you can all assess whether you are right...

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Collaborative Tendering: Part 3

The Customer perspective If you are an SME focusing on public sector tenders, something which should feature highly in any consideration on whether to consider collaborative tendering is the customer perspective on smaller businesses tendering, particularly the...

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Collaborative Tendering: Part 2

Why collaborate? There are a number of reasons why SMEs should consider collaborating to bid for tenders, particularly public sector tenders:- The opportunity to get involved in larger contracts The increasing trend by the public sector to aggregate contracts means...

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Collaborative Tendering: Part 1

What is collaboration? ‘Collaboration’, ‘collaborator’......words with a certain negative connotation deriving from the Second World War. However collaboration appears to have gained a new acceptance more recently... There are dozens of possible definitions of...

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Managing contracts

One should be aware constantly of the potential for problems and opportunities  in the course of a contractual relationship, no matter how simple and straightforward it appeared at the outset. Having a written contract is a good start. One can of course have a verbal contract but this is asking for trouble in all but the most simple of contractual arrangements. And make sure it is in place before you start and is not an afterthought, as it may be difficult to negotiate once you have started the job.

See Managing Contracts Articles

‘Clairvoyant Correspondence’

‘Clairvoyant correspondence’ What does that mean you might ask.  As an attempt at a definition in the present context: ‘having regard to what the future holds for letters or emails which you create’. The context is that of a contractual relationship. In every...

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Costly disagreements: Part 4

Communication breakdown Communication breakdown can happen in any relationship but in a contractual relationship there are steps which can be taken to minimize the risk and the resultant fall-out. Communication breakdown often occurs when there is lack of continuity....

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Costly disagreements: Part 3

Delays  Delays in delivery of goods or performance of services can happen for a variety of reasons  and are a common focus of disputes, additional costs and delays to payment. The causes of delays can be grouped into those caused by:-  the customer  you  events...

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Costly disagreements: Part 2

Deficiencies in customer’s specification of requirements Very often the customer will not get it right first time with their specification of requirements. Sometimes of course the nature of the requirement will dictate that a phased contract is required, with the...

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Costly disagreements: Part 1

Possibly the most common problem after contract award is the business not being paid. Sometimes this can be due to deliberate delay on the part of the customer, either as a result of policy or perhaps because they have cash flow problems. Occasionally the customer may...

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Growing the business

When the business has been going a while, your thoughts might turn to how to grow or develop the business by creating formal contractual relationships with others. Similarly, getting a new business off the ground can depend upon or be facilitated by such contractual relationships. These are not ‘buyer – seller’ relationships but are contractual nonetheless. Once again, pitfalls and opportunities abound.

See Growing the Business Articles

Why have a Shareholder Agreement? Part 5

Continuing the series of examples of important provisions in a Shareholder Agreement. 8. Restrictive Covenants Most shareholders in companies would rather that their fellow shareholders did not:- disclose confidential information to third parties set up or carry on a...

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Why have a Shareholder Agreement? Part 4

Continuing the series of examples of important provisions in a Shareholder Agreement.  6. Valuation of shareholding Many disputes between shareholders arise over the issue of how to value shares, in situations where a transfer or disposal is to happen. It is therefore...

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Why have a Shareholder Agreement? Part 3

Continuing the series of examples of important provisions in a Shareholder Agreement. 4. Important decisions It may be desirable that the normal company law framework and standard articles of association are overruled so that the agreement of all the shareholders (or...

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Why have a Shareholder Agreement? Part 2

Continuing the series of examples of important provisions in a Shareholder Agreement. 3. Sale of Shares General Without any agreement otherwise, a shareholder can sell their shares to anyone. For example, in the event of a dispute they could sell them to a competitor....

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Why have a Shareholder Agreement? Part 1

A Shareholder Agreement will set out an agreed position on what is to happen in a variety of situations which will or may arise in the course of the shareholder relationship. The first answer to the question ‘why have a Shareholder Agreement’ is that to create one,...

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What is a Shareholder Agreement?

A shareholder Agreement is a legally binding arrangement entered into between each of the shareholders in a company by which they agree how their relationship as shareholders will be regulated. It is possible to form a new company with others or to join an existing...

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A Partnership is one kind of formal contractual relationship often adopted by businesses, the other  common ones being a Limited Company and now a Limited Liability Partnership (LLP). It is possible to have a legal Partnership with nothing in writing, however this is...

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