Tighten up to protect against Brexit problems
Smith Partnership, one of the largest firms of solicitors in the East Midlands, understands the commercial issues that are coming to light, following EU referendum BREXIT vote in June 2016.
The recent spat between Tesco and Unilever which temporarily affected the availability of some household brands was, in part, blamed on BREXIT. Some suggested that a higher price for goods is the price to pay for leaving the EU. Whatever the drivers, it’s an indication that these retail and manufacturing giants are willing to play hard ball and so it is to be expected that other business, large and small, national and international, will follow fashion.
With this tougher trading climate in mind, what can be done to protect company interests? Below are pointers on how to improve your business’ position:
- Regularly review your customer / supplier contract. If you don’t have written trading terms then get them. An absence of written terms leaves the door wide open for misinterpretation and results in a lack of a firm footing in the event that a dispute arises.
- Make sure that your trading terms and conditions are properly incorporated into the contract. Publishing terms on the reverse of a delivery note is usually too late in the process of formation of a legally binding contract to rely upon if there is a problem. Look to include your terms on your Purchase Order / Order Acknowledgment. Put them on your website too.
- Be strict about adherence to payment terms. Stick to them - otherwise the slide of extra days / week or months could be taken to be the contractual norm for that relationship. This uncertainty may not suit your business if cashflow gets tight.
- Do your accounting housework: review your outstanding sales ledgers regularly and don’t be afraid to send letters demanding payment. There is always the option to tailor the tone and directness of letters to the individual customer, so sending one need not jeopardise the future trading relationship. Being prompt with your payment reminders and referring them externally for debt recovery if necessary (before they get too old) is part of keeping the lifeblood of cash pumping.
- If the relationship hits a patch with proposed price rises then it is generally unwise to send further deliveries until it is resolved, otherwise you could be taken to accept the price increase.
To find out more about this area of Commercial Law, please contact Alison Neate, Head of the Dispute Resolution Department at Smith Partnership on 0116 247 2001.
Alison is the Managing Partner of the Leicester Charnwood Court office. Contact Alison at firstname.lastname@example.org.