Express Terms of a Contract: Legal Considerations for Businesses

A contract is vital for any business at any stage to protect yourself from risk when trading. A well-drafted contract will help you clearly define each party’s rights and responsibilities, reduce the risk of disputes between contracting parties, and help your projects run smoothly with less chance for bumps along the road. To protect your business interests, your commercial contracts should include clear, express terms that you carefully draft to help mitigate the risks you may face. This article explores the importance of clear agreements, the role of express terms, and how to effectively draft your contracts and contractual terms to protect your business.

What are Express Terms and Why Do They Matter?

Express terms are the specific provisions you and the other contractual parties agree on and include within your contract.

Clearly and carefully drafting express terms within your contacts can help your business reduce ambiguity and prevent misunderstandings in contractual relationships.

Express terms should lay out the contract’s key aspects, including legal and commercial terms. For example, your business should include terms that specify what the supplier must deliver, when they will deliver it, and how much the customer will pay. Various legal terms of vital importance, such as limitation of liability clauses and mandatory data protection clauses, are also required in certain scenarios.

Implied terms are terms that you do not explicitly draft into your contract but still apply due to legal rules, industry practices, or the practical needs of the agreement. Some terms arise automatically under the statute.

You may encounter the issue of implied terms when a contractual dispute arises. A party may ask a court to rule that an implied term should apply within a gap in the contract. 

However, your business should always prioritise express terms, as courts generally prioritise these over implied terms when conflicts occur. If you need support understanding the implications of specific implied terms and how they could apply in English law contracts, you should seek legal advice from a commercial contracts solicitor.

Why are Well-Drafted Contracts Important for Your Business?

Given the risk of debates and disputes around implied terms, your business should prioritise drafting clear contracts with express terms that govern your commercial agreements.

Without a written contract, disputes can escalate quickly, especially where neither party has reliable evidence of their agreement.

What Steps Can You Take to Draft Strong Contracts?

To help you protect your business interests, your business should take a proactive approach to contract drafting. Some key steps to take include the following:

• you should carefully consider the nature of the business relationship or project and ensure the contract you draft is tailored to its needs. Generic templates often fail to address the specific risks or operational requirements of a project;
• your business should also take the time to draft and review each contract carefully. Rushed agreements often lead to costly omissions or ambiguities. Take the time to clearly define all obligations and specify the agreed payment terms, delivery conditions, and any agreed exit rights;
• use clear and correct language in plain English. Clear language can help avoid misinterpretation and prevent disputes over matters such as contractual interpretation and what a clause means; and
• regularly review and update your contracts as your contracts must reflect changes in your business, operations, or legal rules. This is particularly important for suppliers who roll out their contracts as standard terms and use them repeatedly.

Following these steps, your business can draft clear, enforceable and practical contracts. Well-drafted agreements will help reduce risks, prevent disputes, and build a strong framework for good commercial relationships.

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How Can a Commercial Contracts Lawyer Support You?

Contracts and their legal drafting can be challenging, particularly for a business owner with little legal knowledge. Seeking legal advice can significantly improve the quality and effectiveness of your contracts.

The contract needs careful thought and planning, and working with a commercial lawyer will help you identify key risks and decide upon the most appropriate contract type and structure for your needs. A lawyer’s expertise lets you balance strong legal protection and practical, workable terms that your business can use in practice.

Key Takeaways

A well-drafted contract is vital to help protect your business, reduce risks, and create clear contractual frameworks. Focusing on clear, express terms within your contracts can help define responsibilities and reduce the risk of arguments over implied terms, which can cause uncertainty and disputes. If you need help with a contract, you should seek legal advice from a commercial contracts lawyer to help you draft a clear contractual agreement with specific terms that are legally binding and robust. 

If you need help drafting a robust contract or advice on contract terms, our experienced contract lawyers can assist you as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers who can answer your questions and draft and review your documents. Call us today at 0808 196 8584 or visit our membership page.

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