0300 124 0406 Our expertise Team About us Insight Careers Contact Home / Knowledge / Managing contract risks in your business Managing contract risks in your business 8th November 2021 by Jack Firman Managing your contracts is an important way of mitigating risk in your business. Here are some tips for navigating this area: Understand what contracts you are bound by It may sound obvious, but the first step to understanding your rights, obligations and liabilities is to understand what contracts your business is a party to. Think about all aspects of your business, including suppliers, customers, distributors, consultants etc. Bear in mind that contracts can be formed in a number of ways, including orally or by exchange of emails. Contracts should be made in writing wherever possible. This helps to provide certainty on the terms of the contract and therefore reduce the risk of disputes as to the content or existence of a contract. Keep a copy of the contract for future reference. For businesses which enter into a large number of contracts, it’s advisable to keep a contracts register, setting out key information about each, such as whether exclusivity is granted, and renewal dates, to help ensure key dates are not missed. Understand the terms of your contracts Understanding your rights and obligations is critical to managing contract risks. These may be set out expressly within the contract. Terms may also be automatically implied into your contract by law. Key terms to be aware of include: the term or length of the contract what happens when the contract comes to an end how and in what circumstances each of the parties may terminate the contract, and any costs that may be associated with this payment terms delivery obligations, and whether there are any timescales within which deliverables must be rejected warranties and indemnities. Check your insurance is suitable Maintaining suitable insurance cover provides a means of meeting a claim if the worst were to happen. Consider what insurance your business has in place, and whether any of your contracts impose any requirements on you, for example to maintain specified levels of cover. However, it is important to remember that your potential liability under a contract is not automatically limited to the level of the insurance cover, and you may still be liable for any claim to the extent that it exceeds your level of cover, or is excluded from your policy. Protect your intellectual property It is important to ensure that your business either owns or has an appropriate licence to use all intellectual property (i.e. copyright, trade marks etc) that it needs. Similarly, check that you are not unwittingly giving away ownership of any intellectual property, and that any licences you grant go no further than intended. Considerations for licences will include the geographical scope, whether the licensee will have exclusivity and the term of the licence being granted. If you need any advice on the contracts you are considering entering into, or your rights and obligations under a particular contract, we’re here to help – get in touch. About the Author Jack Firman Solicitor View Profile View All Related 8th November 2021 Managing contract risks in your business 22nd October 2021 Are you facing challenges as a social housing charitable trust? 14th October 2021 Are your terms & conditions clear or open to interpretation? 15th September 2021 COVID-19 vaccines for children – what schools need to know Sign up to our newsletter to get the latest news and updates. Sign up Bradford office Church Bank House Bradford West Yorkshire BD1 4DY Phone: 01274 350 800 Fax: 01274 306 111 Leeds office 76 Wellington Street Leeds West Yorkshire LS1 2AY Phone: 0113 849 4000 Fax: 0113 243 9326 Huddersfield office 30 Market Street Huddersfield West Yorkshire HD1 2HG Phone: 01484 915 000 Fax: 0800 368 8449 Copyright © Schofield Sweeney Solicitors. All Rights Reserved. Schofield Sweeney LLP is authorised and regulated by the Solicitors Regulation Authority. Website by Tall Contact Legal information Privacy statement Cookie policy Covid risk assessment Complaints policy We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies. Cookie settings ACCEPT