Protecting Your Business

websitebuilder • 29 July 2022

Protecting Your Business

Many businesses end up in a dispute which may have been avoided, or the extent of it limited, if there was a little investment of time and money reviewing the trading operations, particularly the terms, and taking advice. Whilst a lot of business disputes are resolved without recourse to legal proceedings, having sound terms and conditions and effective processes strengthens the businesses bargaining position, and assists in getting the right result. This is now even more important as we are in a period of economic uncertainty. 


So here are our top ten tips…….                                                                         

1. Review your trading documentation. What does it say? Purchase orders, acknowledgement of orders, delivery notes, invoices, records of conversations and correspondence should all be kept in order. As most businesses are trading on the internet, as well, have you kept and backed up electronic records such as these. If a dispute arises these documents may be invaluable.

2. Do you have terms and conditions of business? Where are these contained? To be effectively incorporated into the trading relationship they need to be contained in a contractual document and/or brought to the other party’s attention before the contract is concluded. A signed agreement is optimum but not always pragmatic. Invoices and delivery notes containing terms may not be sufficient to incorporate them, as these are considered post contractual documents, unless you have a previous consistent course of dealings. 

3. If it’s online trading the same principles on incorporation apply. The most common method to establish incorporation is to make the buyer click or tick acceptance of terms before they can complete the order. If your customers are mainly consumers as opposed to other businesses avoid references to any declaration that the consumer has “read and understood” as this is consider to be an unfair term. Rather instruct the customer to read them carefully before accepting them.

4. Useful terms in a business to business relationship, (as opposed to business to consumer), include an effective retention of title clause which may allow retrieval of your goods should your customer become insolvent. Other terms limiting liability for defective goods or services in relation to description, quality and negligence (other than death and personal injury), should be considered.

5. What are your terms of payment? Do you have a clause stating your statutory right to interest on late payments? Whilst this right arises automatically in commercial contracts, setting it out in your terms shows your awareness and can act as a deterrent. Incentivise early payment with a discount. 

6. Are you clear as to the identity of your customers; are they sole traders, partnerships or limited companies. If it’s the latter and cash flow is an issue think about asking the directors for a personal guarantee. If your customers are consumers review your terms carefully because some may be considered automatically unfair and unenforceable. The Competition and Markets Authority (“CMA”) has issued guidance to businesses on its website particularly following the coming into force of the Consumer Rights Act 2015 (“CRA”).

7. Check your customers’ credit worthiness and monitor it particularly where there are issues arising. Introduce credit limits for new customers and look at reducing credit and / or terms of payment for slow payers.

8. Look after your existing customers by talking to them, building a relationship and making a gratuitous gesture where you can, however small. A large proportion of customers are lost because they no longer feel valued. A competitor who has been able to drop their prices may look more attractive in such circumstances.

9. Invest in good customer service and effective credit control procedures. Talking to debtors at an early stage may facilitate a payment plan and ultimately strengthen the business relationship. A reputation for fair dealings can only enhance your business but don’t be afraid to take action to recover sums where it’s cost effective to do so.

10. Last but not least if you are experiencing difficulties with your customer of whatever nature, or financial difficulties yourself speak to your solicitor as soon as possible, it saves time and money in the long run.

For further information contact A. E. Verona Cocks, Joint Managing Partner and Head of Commercial Dispute Resolution & Insolvency at Paddle & Cocks LLP Solicitors, offering specialist advice on all forms of business disputes, insolvency and alternative dispute resolution. Contact on 01872 672072 or verona.cocks@paddleandcocks.co.uk

by Harjit Gill 11 December 2024
How the New Employment Rights Bill will Strengthen the Employees Employment Protections. By Harjit Gill The upcoming Employment Rights Bill proposes significant changes to the protections employees enjoy in the workplace. If the individual is an employee, understanding how this new Bill will affect an employee’s rights is essential. This article focuses on the key changes relating to unfair dismissal. Key Changes in the New Bill Day-One Protection Against Unfair Dismissal Under the current rules, employees must work for an employer for two years before they can claim unfair dismissal, unless it relates to pregnancy, whistleblowing or trade union membership. This means that if the employer dismisses the employee in the first two years, the employee will have limited recourse to challenge that decision. The two-year qualifying period for unfair dismissal claims will be abolished, and the employee will have the right to challenge an unfair dismissal from the first day of their employment. This change will provide the employee with greater job security and protection, ensuring that employers cannot dismiss the employee arbitrarily during their early employment. New Statutory Probation Period Along with the introduction of day-one protection, the Bill proposes a statutory probationary period of nine months. During this probationary period, employers will have to follow a simplified process for dismissal if they feel that the employee is not the right fit for the role. The government are yet to detail what this process involves but it will definitely be subject to the rules of fairness. After the nine-month probationary period, full protections against unfair dismissal will apply and employers will be required to follow a more rigorous and fair process to dismiss their employees. Right to Written Reasons for Dismissal Currently, the employee must have worked for an employer for two years to request written reasons for the employee’s dismissal. Under the new Bill, this will change. The employee will be able to request written reasons for your dismissal after the nine-month probation period. This ensures that if the employee is dismissed after this period, the employer must provide a clear and written explanation, giving the employee transparency and the ability to assess whether the dismissal was fair. Impact on Your Job Security These changes will significantly improve the employee’s job security, particularly in the early months of employment. Previously, many employees had limited rights during their first two years on the job. Employers could dismiss employees without the need to provide reasons or follow formal procedures unless the employee’s dismissal fell under “automatically unfair” reasons like discrimination or whistleblowing. With day-one protection, employees will have immediate access to employment rights that ensure their employer must act fairly if they choose to dismiss the employee. This change will particularly benefit the 9 million workers in the UK who have been with their employer for less than two years. While these changes offer employees stronger protections, it’s important to understand that employers will still have flexibility and can insert a longer probationary period than what is proposed in the employees’ contract, especially for more complex roles. However, once the statutory nine-month probationary period is complete, the employee will be fully protected by unfair dismissal laws. This means that any dismissal must follow standard procedures and be based on legitimate reasons, such as performance issues or misconduct. When Will These Changes Happen? The reforms in the Employment Rights Bill are expected to take effect no sooner than autumn 2026. This gives employees time to prepare for these changes, while also giving employers time to adjust their policies. However, it’s essential to be aware of these changes now, so employees understand the rights they will have when the Bill becomes law. Conclusion The Employment Rights Bill is set to transform the protections employees enjoy, particularly regarding unfair dismissal. From day-one protection to the introduction of a statutory probation period, their rights as an employee will be strengthened, offering greater security, in the employees first year on the job, helping to create a fairer and more balanced workplace for all. If you require any further information or legal advice on any of the points raised, please contact Harjit Gill on harjit.gill@paddleandcocks.co.uk or telephone 0333 344 9429 quoting HG. *The above highlights some of the changes the Bill is intended to bring about and is not intended to provide legal advice which should be relied on.
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