Commercial

Our commercial team provides a wide range of legal services to the food and drink sector. We understand the trading practices and contracting processes of the various types of businesses operating in this sector, and we are well placed to provide strategic, practical and effective advice on your business contracts and processes, whatever level of the supply chain you are operating in. Emma Roe, who specialises in all matters relating to commercial law, answers some of the initial questions you may have on your trading terms and commercial agreements.

We already have standard terms and template commercial agreements in place with our customers and suppliers.  Do we need to do anything else?

For a number of reasons, it is worth reviewing your trading documents at least every two years, if not annually.

Commercial law is constantly changing, whether as a result of case law or new legislation. This can result in some of your current provisions no longer being effective or valid, or the business no longer having the benefit of the most effective rights and powers available to it.

In addition, your business processes and trading practices may well change from one year to the next.  Your terms and conditions should reflect the reality of how your business operates.

We can review your business processes and trading practices with you, and help to ensure that you have the most effective trading platform for your business, together with relevant templates that reflect your various trading relationships and the position of your business in the overall supply chain.

Amongst other things, we will consider:

  • when the existing documents were drafted;

  • whether they were originally tailored to reflect your business processes;

  • whether they are effectively incorporated into your customer or supplier contracts; and

  • whether there have been any significant changes to your trading practices, or to the applicable laws that apply to your business, since the documents were drafted.

We can also provide staff training or workshops to help your staff to understand the commercial documentation the business has in place and to ensure the effectiveness of those documents is not being inadvertently undermined through the actions of staff.

Do we need new or different commercial contracts if we get a new customer or enter a relationship with a new supplier?

It really depends on how you manage your trading relationships and the nature of the new relationship. 

For example, if you are a wholesaler of goods you may have an accounts-based system and apply standard terms to the majority of your customers and suppliers, whilst using a small number of framework or bespoke commercial agreements for your larger key customers and/or suppliers (i.e. warehousing/logistics agreements or manufacturing and/or co-packing agreements).  On the other hand, you may rely on standard terms or agreements across the board.

Alternatively, depending on what level of the supply chain you are operating in and the size of your operation, you may find that your business is required to trade on the other contracting party's own terms and conditions.  This is particularly the case where your negotiating power is more limited – for example, where you are supplying products into the larger multiple food and drink retailers.

It is always worth considering the suitability of your current terms and agreements for any new trading relationship.  This is to ensure that the applicable risks are appropriately managed, that the terms and conditions reflect your commercial objectives and that, as far as possible, they provide you with the most appropriate rights and remedies for those times when things don't go quite to plan.

Furthermore, where you have limited control over the terms or agreement, it will be important for the business to have suitable insurance and internal practices and processes in place, so that the trading risks of your commercial agreements can be effectively managed and mitigated.

We can help you to review and amend your business processes and trading practices as a whole, or negotiate the terms of any proposed new contract (whether a bespoke agreement or based on standard terms), to ensure that the final document reflects the nature of the trading relationship and that, so far as is possible (and commercially viable), applicable risks are managed.

We can also help you to create and implement internal practices and processes to manage the trading risks presented by the commercial agreements.

We are currently having trouble getting paid by one of our customers. What can we do?

There are two things to consider here.

Firstly, our award-winning specialist debt recovery team can assist you to recover existing debts.

Secondly, we can help you to prevent future non-payment issues by reviewing your current credit control process and the rights you have in the event of non-payment in your commercial documentation.

From this review we can create a more effective credit control system tailored to accommodate the commercial realities presented by your trading relationships, and where your business sits in the overall supply chain, together with supporting documentation.

Depending on the nature of your business this could include an accounts application form, revised terms/agreements to maximise your rights and provide you with a number of options in the event of non-payment, guarantees (personal, parent company and/or cross-company), and template letters to chase payment.

We can undertake this review separately or as part of a broader 'business process' review.

Our team

Ian Dawson

Partner

Employment & HR

Direct Line +44 (0)113 297 7735

Emma Greenwood

Partner

Corporate

Direct Line +44 (0)113 297 8068

Rob Lucas

Partner

Head of Intellectual Property

Direct Line +44 (0)113 297 8941

Lyn Dario

Partner

Head of Environmental & Regulatory

Direct Line +44 (0)113 297 3779