Things to consider when accepting a new contract

People often ask what are the key things to look out for in a new contract? Whilst nothing beats getting a legal review, there are things everyone can look out for.

Things to consider when accepting a new contract

So, whether you are entering into a new mobile phone contract, taking out finance or negotiating contract terms with a new client, it is essential that you read through the contract thoroughly. Even if you don’t understand everything in there, at least you will know to ask questions in order to get the picture of what you are expected to do.

Sign it, dispute it, but don’t ignore it!

The first thing to overcome is the fear of signing a document. There are still some people in this world who believe not signing means that you can avoid any liability if anyone tries to sue. This is just plain wrong.

In short, you have received the contract, worked in accordance with its terms, taken the benefits provided by it and as a result, you then need to take the burden imposed by the contract if anything goes wrong.

If you disagree with anything contained in the contract, you need to voice that disagreement (preferably in writing so you can evidence it) early on. It would also be helpful (but not essential) if you suggest changes to anything you don’t like in order to speed up the process to securing an agreement which you are comfortable with.

Ultimately, you will then need to decide to either accept the terms or walk away. Silence will simply mean that you agree with the contract.

The same principle goes the other way. If you suggest changes and your client ignores your request, you have a strong argument to say that they have accepted it unless they can demonstrate otherwise.

Notice period

At the outset of the contract, you probably can’t see any reason why you would want to get out of the agreement, it is after all, the best deal you have ever made! However, there will come a time when you will look to move on. It is therefore essential that you have the right to terminate upon giving as short period of notice possible.

In a contract for the supply of labour services with recruitment agencies and end clients/customers, one week is considered the standard period of notice. Although this can vary significantly between contracts, even up to 6 months, depending on how specialist your services are and the duration of the contract.

No matter how long the notice period is that you agree, just make sure it is documented and you can (and will) adhere to it.

Additional charges

If you are going to invoice for items over and above your standard fee or hourly rate, ensure they are clearly documented in the contract. This will include items such as VAT, travel expenses, completion payments/bonuses and the like.

Without specifically referencing them in the contract, you could struggle to claim them on your invoice. This will require you to incur additional time and expense chasing for something which could have easily been agreed up front.

Services to be provided

Ensure that the contract is abundantly clear on the services you will provide under the contract. Try and think of every eventuality and document it in the agreement. Whilst a vague description of the services could be good if you want to add more tasks to the contract later on without adjusting the fee, a specific job description will enable you to charge for any additional work not envisaged when providing the initial quote.

Being clear on the services being delivered is just one part of fully understanding your obligations in the contract. Complying with all of the requirements contained in the contract is of the utmost importance. In particular, when contracting for the provision of your services, you should check the clauses which specify the level of insurance you need to have in place for the work you are to undertake. Your insurances may have specific exclusions in place which may affect your cover should you need to make a claim for defective work or other liability. This will leave you (or your company) having to pick up a bill which you would have expected your insurance company to take care of. The contract could cost you more than you think.

Remember, it is good to know your contract. Entering into a contract which you do not fully understand or agree with will leave you exposed to unknown commercial risks and liabilities which can be easily avoided by simply taking the time to read the agreement before signing it and seeking professional advice where necessary.