CONTRACTUAL disputes often arise when a business hasn't read the fine print.
In fact, some businesses do not read a variety of legal documents at all, often signing them away without realising the possible future legal consequences, according to Kreisson Legal .
Sometimes businesses rush into signing a contract, or don't sign one at all or sign one where the contract has no relevance to what is being provided.
Some businesses sign a contract that does not contain important elements such as:
* Description of goods/services
* Intellectual property and confidentiality
Standard contracts are sometimes produced by suppliers who proclaim "It's our standard contract, we can't change it". The person who makes this statement may not have any authority to change the contract or it might be worthwhile re-considering whether it is worth doing business with a supplier who isn't willing to negotiate.
Another common problem is when businesses believe an agreement can still be in place even if legal contracts have not been signed. For example, if two parties have spoken on the phone or exchanged letters or emails, then there is good chance that an agreement may have been reached. It will not matter that there is no formal legal contract in place.
Introducing competition amongst suppliers can change all of this. Corporates adopting tendering processes are increasing in momentum. Corporates have begun to realise the financial benefits of these processes, such as suppliers submitting a lower price or a better deal overall to ensure that they are the successful supplier and other benefits such as a stronger negotiating position.
The corporate's business expectations and their contract terms should be made known upfront to suppliers. Suppliers then have very little room for excuses and will be required to meet business expectations and to negotiate a balanced contract.
Contractual terms, however, need not dictate an entire relationship with a supplier. It is important for businesses to maintain constant contact with its suppliers.
Good supplier relationships can mean better business outcomes as suppliers will often gain a better understanding of their client’s business and how they can help the client’s business be successful.