BEWARE THE SMALL PRINT
Chafes Press Release PR130.2 : 17th April 2008
Your business has just won a major order or long term supply commitment from a large corporate customer. You are, quite rightly, delighted given the impact which you know your hard won, new order will have on both the top line and bottom line of your business – particularly in the current uncertain economic climate prevailing in the UK.
At this stage however you should pause for a moment and be sure that you are fully aware of the contractual terms on which your goods or services will be supplied. The large corporate will almost invariably only place orders based on its standard conditions of purchase. Such conditions of purchase frequently contain punitive provisions relating to delivery, quality and liability which could have serious ramifications for your business in the event of late delivery, non delivery or where there are quality issues.
Ideally a seller should always operate on standard conditions of sale containing “seller friendly” provisions relating to quality/liability, delivery and other areas of key commercial importance. Large corporate customers with their own conditions of purchase are, however, generally able to refuse to contract on the basis of seller’s conditions of sale due to their strong bargaining position. At the very least make sure that you read the buyer’s terms and if necessary, take legal advice to ensure that you understand the possible risks to your business.
If you are faced by any of these issues, or would like to adopt new standard conditions of sale, please contact Tony Morris, Head of Business Services at Chafes Solicitors on 0161 477 1525.
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