{"id":4222,"date":"2022-06-22T08:13:07","date_gmt":"2022-06-22T07:13:07","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=4222"},"modified":"2022-06-28T07:50:52","modified_gmt":"2022-06-28T06:50:52","slug":"commercial-contract-mistakes","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-contracts\/commercial-contract-mistakes\/","title":{"rendered":"Common Mistakes When Entering Into a Commercial Contract in England"},"content":{"rendered":"\n

A commercial contract is a legal document that will form the foundations of your business. Therefore, you must draft and review important terms before signing an agreement<\/a>. If you fail to do this, you will likely face complications with running your business. This article will explore some common commercial contract mistakes that companies make, so your business can avoid them.\u00a0<\/p>\n\n\n\n

In this article, we will discuss common mistakes that may occur in commercial agreements between your organisation and another business. Further, we will focus on business contracts and ignore employment contracts and settlement agreements.<\/p>\n\n\n\n

What is a Commercial Contract?<\/h2>\n\n\n\n

Essentially, a contract is a legally binding agreement between two or more parties. In a commercial sense, business contracts typically occur between businesses and individuals regarding how a business will run. For instance, a commercial contract may cover an agreement regarding the transporting of goods. In most cases, a commercial contract will be in writing, however, this is not always the case. Sometimes, these contracts can be verbal. Some common mistakes are outlined below.<\/p>\n\n\n\n

1. Naming the Wrong Party<\/h3>\n\n\n\n

This sounds simple, but using the correct name for a business can sometimes be tricky.<\/p>\n\n\n\n

For instance, consider your business is providing goods for a supermarket chain (which we will call \u2018Big Stuff\u2019). You may draft a contract to record the deal and describe them as \u2018Big Stuff.\u2019 Although this may be their brand name, they may have different names for other businesses within this chain. For example, their food stores may be named \u2018Big Food Stuff Limited,\u2019 their petrol stations ‘Big Petrol Stuff Limited\u2019 and so on.\u00a0\u00a0<\/p>\n\n\n\n

Therefore, if you use \u2018Big Stuff\u2019 in your contract and not their legal name (leaving out the \u2018Limited\u2019 or \u2018Ltd\u2019 description), you may present them with a potential loophole to escape the deal down the line.<\/p>\n\n\n\n

2. Using Unenforceable or Illegal Wording<\/h3>\n\n\n\n

It is not mandatory to use a lawyer to draft contracts. However, doing this will decrease your risk of using unenforceable or illegal wording.<\/p>\n\n\n\n

Your company will likely not wish to agree to an unenforceable clause. This may be the case, particularly if the other business has the benefit of legal advice and knows you cannot safely use it against them in the future. Further, most contracts involve a lot of \u2018give and take\u2019 between the parties. As a result, your organisation may risk providing the other party with an advantageous clause because they supply you with one (of limited value).<\/p>\n\n\n\n

3. Agreeing to Unreasonable Wording<\/h3>\n\n\n\n

While many business owners feel confident negotiating commercial deals, most are not entirely familiar with legal contract drafting. Unfortunately, there are numerous potential consequences to attempting a complex written agreement without legal assistance<\/a>.<\/p>\n\n\n\n

For instance, your business may be at risk of agreeing to unreasonable wording that may not be typical for a contract of that nature. Alternatively, specific wording may result in an agreement that creates an unbalance between the parties. Unfortunately, legal contracts tend to contain \u2018legalese\u2019. Therefore, understanding the true impact of particular wording can often be tricky. <\/p>\n\n\n\n

4. Grammatical Errors<\/h3>\n\n\n\n

Finally, simple grammatical errors can significantly impact a commercial deal. For instance, potential mistakes could include:<\/p>\n\n\n\n