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One crucial, often overlooked aspect is reviewing and updating key commercial contracts. Since a significant portion of a business’ income stems from these relationships, it is vital for businesses to safeguard them.
Ensuring your commercial contracts are legally sound can protect your business from potential disputes or litigation in the future. Our commercial contract audit service will identify any legal risks and help you to take proactive measures to mitigate them.
One of our specialist commercial solicitors will review any and all of the following existing documents before providing you with our risk assessment, highlighting potential risks and vulnerabilities in your documents:
This list is not exhaustive. For more details, please consult one of our commercial solicitors.
Our audit offer is made to you without any financial commitment – we will advise you if we recommend any updates. We are happy to provide you with quotes for doing so, but all of our recommendations will be on a no-obligation basis.
One of our specialist commercial solicitors will arrange an initial 30-minute call with you to understand your strategic objectives and any specific concerns you may have at this stage before conducting a full review of your commercial contracts.
Following our initial conversation, we will provide a preliminary review of your commercial contracts.
Once you have considered our preliminary review, we can arrange a follow-up call with you to discuss our recommendations and any updates you would like us to go ahead with. We can also provide assistance during negotiations, if needed. This advice will be chargeable, and fees agreed with you in advance.
Reviewing and updating the constitutional documents applicable to the ownership and management of a business is essential for ensuring that they remain relevant, effective and aligned with the evolving needs and circumstances of the company and its shareholders.
Here are several reasons why it’s important:
Over time, the ownership structure of a company may change due to new shareholders joining, existing shareholders leaving or changes in ownership percentages.
Businesses evolve, strategies and objectives may change over time and agreements relating to the ownership of a company should align with these changes to ensure that it continues to support the company’s goals and objectives effectively.
Constitutional documents typically include provisions for resolving disputes among owners of a business shareholders and as a business grows or circumstances change the effectiveness of these mechanisms may need to be reassessed.
Shareholders’ agreements often include provisions related to exit strategies and liquidity events, such as buy-sell agreements or rights of first refusal and such provisions should accurately reflect the preferences and intentions of the shareholders, particularly in the event of a potential sale or other liquidity event.
All constitutional documents will outline corporate governance structures and decision-making processes within the business, regardless of the nature of the entity involved and making sure these provisions are up to date can help streamline decision-making and improve governance practices.
Regularly reviewing and updating constitutional documents demonstrates a commitment to transparency, fairness and good governance and helps to maintain trust and alignment amongst owners of a business by ensuring that their rights and interests are protected and that the documents continue to reflect their collective goals and priorities.
Misunderstandings regarding the scope and entitlement to IP rights are frequent. You should make every effort to understand the nature of the IP and justify your ownership. Lucrative corporate deals have sometimes fallen apart because one party made an incorrect assumption that it owned the relevant IP. This often happens where the rights are unregistered such as copyright and unregistered design right but mistakes can also be made with inadequate or lapsed trade mark registrations.
Ways to mitigate IP problems may be summarised as follows:
Ensuring that all documents that licence or assign IP to the company are valid and comprehensive and identify all subject IP correctly will validate a company’s rights to that IP as well as its entitlement to commercialise it. It should also be standard practice to ensure that non-disclosure agreements (NDAs) are in place where you share confidential information in connection with new ventures.
Depending on the nature of the business, systematic audits should be carried out regularly to evaluate the IP owned, used or acquired to enable better management of risk and implement best practice. It is essential that patents are applied for to cover all unique aspects of an evolving technology and that trademarks protect the branding of the right goods or services and have not been inadvertently allowed to lapse.
You should assess the activities of your competitors to see if there is use of similar branding, trade marks and designs. Some businesses will need to perform patent landscape searches so that they can move their technology forward with a clear view of the risk they run of infringing third party-owned patents. Trade mark searches are usually easy to perform in most relevant jurisdictions.
Regularly reviewing your supplier contracts is also crucial to the ongoing success of your business – here’s why:
Supplier contracts dictate pricing, payment terms, and penalties for non-compliance so reviewing contracts helps to ensure you get the best value for your money and that there are no hidden costs or unexpected fees.
Supplier contracts often specify quality standards, inspection procedures, and performance metrics and it is imperative you understand these clauses so that you can be confident your suppliers are committed to delivering goods or services that meet your requirements and expectations.
Contracts also govern the practical terms of the relationship between you and your suppliers. Reviewing contracts allows you to clarify expectations, establish communication channels, and set benchmarks for performance, fostering a positive and productive partnership.
Markets and business needs can change rapidly, so you should regularly check to ensure terms still align with your current objectives and whether adjustments are necessary to accommodate evolving circumstances and strategies.
Supplier contracts often involve the exchange of proprietary information or the creation of IP so appropriate safeguards should be in place to protect your company’s IP assets.
Increasingly, businesses are focusing on sustainability and ethical sourcing and it is critical that suppliers adhere to any environmental, social and ethical standards that are important to your business, aligning with your values and commitments.
Supplier contracts, other agreements and understandings with third parties, especially your competitors or entities you have influence over, could have the effect of preventing, restricting or distorting competition within the United Kingdom. This can amount to a serious breach of the law and may lead to significant fines imposed on your company, third-party damages claims, and criminal penalties for directors. Inadvertent anti-competitive conduct such as setting minimum prices, dividing markets or restricting supplies may be revealed in any contract audit. You might however be able to justify certain actions if your business falls within a possible individual exemption or an automatic block exemption.
Whether you’re a startup or an established enterprise, your T&Cs serve as the cornerstone of your relationship with customers, outlining rights, responsibilities, and expectations. Here’s why ensuring your T&Cs are up-to-date should be a priority for your business:
Regulations governing various industries are subject to frequent updates and failing to adhere to these changes can expose your business to legal risks and liabilities.
Business environments evolve rapidly, and so do potential risks and challenges, but by regularly reviewing your T&Cs you can incorporate terms that protect your interests against emerging threats, such as cybersecurity breaches, data privacy violations, IP infringements and malicious artificial intelligence applications.
Transparency cultivates a positive relationship with your customers and updating your T&Cs provides an opportunity to communicate any changes in policies, pricing, or services clearly and transparently.
As your business grows and diversifies your T&Cs should evolve accordingly, whether you’re expanding into new markets, launching innovative products or revising your pricing structure.
Clear, concise, and up-to-date T&Cs contribute to a positive customer experience by eliminating ambiguity and confusion and mitigating misunderstandings.
In today’s litigious society, businesses face various risks including contract breaches, IP disputes and personal data breaches, so by regularly reviewing and updating your T&Cs with the assistance of our experts, you can identify and mitigate potential risks proactively.
Treating your commercial contracts as living documents that evolve alongside your business is essential for long-term success and by prioritising regular updates you demonstrate your commitment as a business to legal compliance, transparency, customer satisfaction and risk management.
TWM’s Commercial, Contracts and Intellectual Property team advises businesses of all sizes, from entrepreneurial start-ups to large multi-nationals, on all aspects of their operations and throughout the lifecycle of their business. We pride ourselves on doing so in a solutions-oriented manner with your specific business objectives in mind.
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