Should I Standardise All My Business Contracts?

When running a business as a supplier, you will hopefully have many customers during your business journey. Contracts are vital legal documents to protect your business from risk when dealing with multiple customers. However, contracts can take time and effort to formalise. Standardising your contracts can offer significant benefits such as efficiency, consistency, and reduced legal risks, but may only be appropriate for some of your business projects. Standard form contracts may only be suitable for some of your business relationships or business transactions, in which you may need more bespoke legal agreements. This article explores whether your business should standardise its contracts.

What Are the Benefits of Standardising Your Business Contracts?

As a supplier, prioritising efficiency will help you maintain a competitive edge. In a fast-paced and demanding business environment, delivering services or goods quickly and with minimal administrative back and forth with your customers can make a significant difference. 

Standard contract terms are a vital tool for achieving this efficiency. Suppliers can streamline the contracting process using standardised terms and conditions, allowing for faster negotiations and a quicker way to get a deal over the line. This can help reduce the time spent on administrative tasks and free time to focus on delivering value to clients. Today, many suppliers use standard terms to ensure that they can operate efficiently while maintaining consistency and reducing legal risk. 

Standardising contracts across your business can bring several key advantages, for instance:

Standard Terms Can Improve Efficiency and Save Time and Resources

You can significantly speed up the contract drafting and management process using pre-approved template standard terms and conditions. However, you must ensure your lawyers regularly review and update these templates to address any changes in laws or business practices over time. When you standardise your contracts, you stop the need to draft and negotiate new agreements from scratch every time, allowing your business to move quickly to secure new contracts. 

Consistency Means Uniform Protection Across Your Customer Contracts 

Standardised contracts help ensure that your terms and conditions remain consistent across all agreements. This uniformity can help protect your business interests in every deal you make. With everyone working from the same set of documents, you reduce the chances of disputes arising from ambiguous or inconsistent clauses. For example, if your standard terms set the same payment terms and termination rights for all customers across the board, you will have better business consistency. 

Consistency also makes it easier to train staff and manage contracts. For example, your sales teams can quickly learn your standard terms and use their knowledge to address customer questions.

Mitigate Legal Risks with Clarity

Standard contracts, when well-drafted and regularly updated, help mitigate legal risks. A legal team should thoroughly review these templates to ensure they include all crucial clauses and minimise the risk of omissions or errors. Clear, unambiguous terms are easier to enforce and less likely to result in disputes that lead to litigation. 

Examples of Non-Suitability  

Standardising contracts can be highly effective but may only sometimes be the right approach. You must carefully consider the nature of your business and your contracts. If you deal with complex, high-value transactions or offer highly bespoke services, a fully standardised contract or terms and conditions might not suffice. In such cases, flexibility is crucial. You may need to tailor your standard agreements to meet the unique needs of your clients or to address specific legal concerns that a standard template cannot cover. 

For instance, specific sectors may have regulations requiring particular contract terms, which a general template may not cover. Customers may reject using your standard terms if their project is particularly niche and your standard terms do not cover their requirements. A lawyer can help guide you on this, as we explore below.

Importance of Legal Advice in Standardising Contracts

Before you decide to standardise all your business contracts, seeking legal advice from a commercial contracts lawyer is sensible. A commercial contracts lawyer can help you understand if standardising your terms is appropriate for your business activities from the outset. 

A commercial contracts lawyer can help you draft appropriate standard term templates tailored to your needs. They can also ensure that your contracts comply with legal requirements through regular reviews and help with customer negotiations. 

Key Takeaways

Standardising your business contracts can offer significant benefits, including increased efficiency, consistency, reduced legal risks, and a simplified contract review process. Many suppliers now take this approach using standard terms and conditions. However, you must ensure that standardising your contracts is appropriate for your business activities. Before deciding to standardise all your business contracts, you can seek legal advice to ensure your contracts are well-drafted, legally sound, and tailored to your business needs.

If you need help with a contract, LegalVision’s 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.

Frequently Asked Questions

1. Should I use a standard contract for every client?

Not necessarily. While standard contracts are efficient and ensure consistency, they may only suit some situations, especially for bespoke projects or complex transactions. A lawyer can help guide you on this.

2. How can legal advice help with standardising contracts?

Legal advice is crucial when standardising contracts. A lawyer can draft templates tailored to your business, ensure they comply with legal rules, and advise when to use standard contracts and when a bespoke agreement might be more appropriate. Regular legal reviews also help keep your contracts up-to-date and legally sound.