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Terms and Conditions – A much neglected business issue for Creative business; however relevant Terms and Conditions can protect your business!
May 9th
Article 09/05/2012
The subject of terms and conditions traditionally for most businesses is a necessary part of doing business however for Creatives its usually the last issue on their mind. It’s also common for Creatives to acquire someone else’s terms and conditions or writes their own contracts. Unfortunately the credibility of these contracts is only tested in times of dispute; so contracts drafted in bullet points or acquired from an unreliable source generally don’t contain the correct enforceable clauses to assist the business to resolve issues that arise.
Similarly, many companies choose to do business on a handshake, as honourable as this may sound, the frailty of the contract is exposed when a dispute arises, as there is no details or fall back position to resolve disputes. Writing down the details of how you’d like to do business is a simple idea and best captured in a contract that is tailored to the relevant business sector and business type.
There seems to be a natural resistance to formality and detail, yet during times of disagreement it’s often the detail that will protect a business.
Terms and conditions can be for many Creative businesses a way for outlining ‘how they want their customer to engage’ with their services, from quotation to completion of the work.
This also means, outlining your payment terms, the IP ownership and managing the clients cooperation, for example ‘sign off’. All these issues are central to ensuring you get the work done on time and in-line with your Creative business strategy while getting paid.
Its also common for potential clients to request Terms and Conditions, if you don’t have a relevant set of Ts and Cs, then you’ll simply accept the terms offered by the client or in some cases the business runs the risk of signing up to a contract unaware of the real consequences or meaning of the contract.
Having a relevant, sector focused contract, in-line with your Creative business is one way of avoiding unnecessary disputes and allows the Creative business owner to concentrate on doing the work they enjoy doing.
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Create Ts & Cs collaborating with UWS to develop bespoke contract services for international markets!
Mar 20th
Create Ts and Cs has recently won a research and development grant which will see a new collaborative project begin this month. Create Ts and Cs has joined up with the University of the West of Scotland and Law Wise, the University Law Clinic, to conduct research into Australian and New Zealand contract and commercial law.
The project will provide invaluable insight into the possibilities of extending Create Ts and Cs services.
Trading for over three years and based in Glasgow and Edinburgh, Create Ts and Cs has successfully built a reputation for providing small businesses with bespoke terms and conditions. Our unique approach to providing commercially focused bespoke contracts has allowed us to build a company that’s focused on our client’s contract needs.
Dale McFadzean, Academic Director Law Wise Law Clinic, said “we are delighted to be working with an innovative business such as Create and we hope the research findings lead to future expansion and collaboration”. Create Ts and Cs, Managing Director, David Reilly said “This is a great opportunity of us to work with a progressive University, who shares a similar ethos to us”
David continues, “Our goal is to simply assist small businesses avoid unnecessary business disputes”. “We provide our customers with contracts relevant to their business sector, sales processes and operations.
Our customers require contracts that enable them to protect their business, act professionally and enter into business agreements that allows them to managing their client’s expectations and build healthy business relationships”.
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Video – 5 Tips when negotiating with a larger organisation – having Ts and Cs helps!
Jun 28th
What are your experiences?
Blog – SME’s dealing with Larger Organisations – having Terms and Conditions of Business helps!
Jun 7th
According to Earl Nightingale, famous author and broadcaster “You can measure opportunity with the same yardstick that measures the risk involved. They go together”. He continues, “Wherever there is danger, there lurks opportunity; whenever there is opportunity, there lurks danger. The two are inseparable”.
In many cases, especially with smaller business, (start-up or SME) negotiating with larger organisations, there lives both an opportunity and danger. There is of course an ‘inequality’ in bargaining power. This equality is generally apparent during negotiations. Most large organisations have legal departments and it’s not uncommon for a small company to be pitched into a negotiation involving a corporate legal department.
It’s during these situations that larger organisations may question or request your Terms and Conditions and subsequently changes to your contract or certain clauses omitted. In certain circumstances company contracts are compared and each clause examined individually; this is commonly known as the ‘battle of forms’. Experienced businesses use Terms and Conditions to position themselves professionally with potential clients and outline how they want to do business; for example getting paid, liability, protecting their IP etc. A well drafted contract will also help the business manage risk and ultimately save money by avoiding unnecessary disputes.
The following 5 points are worth remembering before you enter into negotiations;
1/ If you don’t have a set of Terms and Condition, then its leads to the smaller company inevitably following the only contract available, that’s the contract of the larger organisation.
2/ Smaller businesses can readdress the balance when negotiating with a larger player; its how you ask that counts and having Terms and Conditions gives the SME an advantage.
3/ Such negotiations can be tense and feel overwhelming, a company with a niche product or service can be in a powerful bargaining position and not realise it, distracted by events or potential size of the opportunity.
4/ Don’t feel flattered; you will end up working harder for less and obtain less appreciation for doing so, vanity costs money!
5/ Be confident, it’s ok to feel pressured by a larger company’s demands. However the same rules apply when doing business with smaller businesses, if you have the capability to deliver services, it’s profitable for you and the risk and scope can be managed then its worth negotiating or perhaps in certain cases worth walking away.
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Tougher Partnership Rules Could Increase Liability Risk
May 16th
Legal experts are calling for a change in the law to make it easier to prosecute partnerships and individuals for criminal offences, even after the business has been dissolved and no longer officially exists.
Under current legislation a partnership which has been dissolved no longer has any legal existence and cannot be called to account to for any allegations of wrong doing.
The High Court has recently produced a Discussion Paper on Criminal Liability of Partnerships in which the Scottish Law Commission considers ways of preventing the prosecution of a partnership from being frustrated by its dissolution. It also examines the circumstances in which individual partners may be held criminally liable for offences committed by a partnership and asks whether legislation should be introduced to make it easier to prosecute partners as individuals.
“Where there is evidence that a partnership has committed an offence, it should be possible to prosecute that partnership, and make the partners liable for any fines,” said Patrick Layden QC TD, the lead Commissioner on the project.
“A partnership and its partners should not be able to avoid liability just by being dissolved. Our Discussion Paper explores ways to prevent this. We also consider whether it should be made easier to prosecute individual partners for offences committed by the partnership, providing an added incentive for partners to ensure that their partnerships comply with the law.”
However, even under existing legislation many partners can find themselves embroiled in problems long after their business has ceased to exist unless the proper procedures have been followed, warns David Reilly, commercial director of Create Ts and Cs, which specialises in tailor made commercial contracts for SMEs.
“Dissolving a partnership can already appear complicated to businesses and any new changes to the legislation must be communicated with this in mind,” said Mr Reilly.
“It not uncommon for some companies to move from being limited companies to partnerships, then back to limited company or a sole trader.
“Some business people have a tendency to go on a journey which leaves a complex legal legacy behind them especially if they don’t dissolve partnerships as they move.”
“Failing to dissolve partnership is a bit like business bigamy. Most people entering a second marriage will make sure they have been divorced first, but not all companies operate so tidily,” said Mr Reilly.
“If a partnership is not resolved it can cause problems with a lot of issues including liability, intellectual property and the relationship with suppliers.
“If there is any intellectual property created within the partnership it will require the partnership being dissolved and the intellectual property being transferred to the next business entity in order for people to use that IP in the next business venture.”
The Commission has called for the views of interested organisations and members of the public by to be submitted for consultation before 12 August so that it’s final report can be published later in the year.
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The curse of the Verbal agreement…….getting it in writing matters!
Apr 4th
So what’s the problem with verbal contracts, it seems sensible on the surface, why can’t people just get on with doing business based on a rational conversation?
The problem with verbal agreements as per the famous quote by Sam Goldwyn (film boss from 1930′s)” is that they are not worth the paper they are written on”.
Of course it’s legal in certain circumstances, (depending on the type of law) also a budget to argue the issue will help, without money to contest the issue in court, how else can you prove the contract exists?
As demonstrated by the England bid to host the world cup in 2018, verbal contracts when they go wrong, generally lead to post event denial, bad feeling and an overall shambolic situation. Listening to the commentary you would think the parties were describing two different situations rather than the same event.
Verbal agreements represent an unnecessary business risk and create ambiguity from the beginning of the client or supplier meeting. Clear communication with clients is a difficult thing to achieve at the best of times, so omitting a written contract and relying on what everyone remembers to be the truth appears ludicrous.
The physiology of a verbal contract seems to suggest a keenness to be flexibility as a service provider or accommodating as a client. An immediate willingness to trust without knowledge of the people involved or the full extent of the circumstances is an interesting way of exposing your business to uncertainty and all to avoid some paperwork or explore the client or supplier’s service offering or business intentions. This isn’t to say doing business with friends is a walk in the park, sometimes familiarity can lead to you being last to be paid or expected to deliver a lot more because of the friendship. So, arguably formality tests the strength of commitment. Trust is a very important part of business and perhaps should be earned over time.
It only takes two minutes to type “problem with verbal contracts” into Google to find out how problematic it is to embark on a non-written agreement. Perhaps a written contract is our way as humans, to get to know each other under the banner of legal protection, so post contract we can demonstrate those charming traits of over delivery and flexible customer service. Impressing a company under contract is more likely to lead to both parties being satisfied rather than one disgruntled party.
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