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Business owners or directors often negotiate and sign contracts. However, various team members may need to play their part to ensure contracts are issued and managed correctly. Training relevant staff can help you get contracts signed more efficiently and manage risks once your business signs a contract. This article will explore how staff training on contracts can help prevent legal risks.
Why Are Contracts Important for My Business?
As a supplier of products or services to customers, your contracts are vital legal documents. A contract can help protect your business from critical legal risks. For example, a contract can help ensure that you:
- get paid on time;
- have remedies against your customer if they breach your agreement; and
- have the right to end the agreement.
Contracts can also protect your business if things go wrong, such as limiting your liability to your customer if you breach your obligations.
Why is Training Staff on Contracts Important?
Training your staff on contracts can protect your business in various ways. Staff training is a vital part of contract risk management. It is also good practice so your team members understand your contract management process, how your commercial contracts work, and what they do.
You should train relevant staff involved in customer contracts on different aspects of the contracting process. We explore how training can differ at each stage of the contract formation process.
Before Signing the Contract
Certain key staff members will manage your business’ customer relationships. As part of their roles, staff may be responsible for sending new customers copies of your standard terms and conditions or contracts.
At this stage, staff should understand matters, including:
- which contractual documents to send to customers;
- if they need to send the customer a scope of work to approve or an order form to sign;
- who should sign the contract and how; and
- who the customer should direct contract enquiries to.
Responsible staff must issue the correct contractual documents to customers and ensure they are signed correctly. Further, if a customer seeks to negotiate contract terms, your staff should know how to address those queries. For example, would your staff need to escalate a customer’s requests to the company directors or lawyers?
You should provide regular training and ongoing support to your staff, ensuring they understand that they can ask questions when necessary. This is particularly important if any aspects of your product or service delivery change or your legal team updates your standard business contracts.
After Signing the Contract
Once your business signs a contract, you must comply with it. Any relevant staff who will be involved in the contract needs to understand what the contract says and their obligations. Everyone must know their role under the contract. Training relevant staff members on their obligations under your signed contracts is essential to ensure compliance and avoid breaching your agreement.
You should also train staff on monitoring progress over a contract term to help keep track of how far the business has delivered on its contractual obligations.
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How Can Training Staff Help Prevent Risk?
Training your staff on contracts can prevent various risks. For example, effective staff training can:
- ensure projects run smoothly and avoid problems and potential disputes;
- improve customer service if staff know how to answer questions relating to contracts raised by customers; and
- help staff feel confident in their roles and understand their responsibilities. Certain team members must understand their obligations if they are responsible for customer deliverables.
Failing to train staff on what your contracts state and what they need to deliver can lead to you falling in breach of contract and your customer seeking various legal remedies against you.
Download this free Commercial Contracts Checklist to ensure your contracts will meet your business’ needs.
Key Takeaways
Your team must understand the contracting process at your business. Relevant staff members should understand the procedure for entering new customer contracts and how to deal with problem issues. When you have signed contracts, staff should know their obligations, and training can help ensure compliance.
If you need legal advice on commercial contracts or training your staff on contracting, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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