No matter what sort of Business you are in, it’s critical to ensure that your contracts are up to date and accurately reflect any changes in the law that are relevant to your particular business.
For example there have recently been changes to the Building & Construction Industry Security of Payments Act and the Home Building Act that affect the Building and Construction Industry and the Personal Property Securities Act that can impact every business to name a few.
You need to review and update your contracts on a regular basis. We understand that this process may be time consuming, however, if you do not set this as a priority, there are a number of risks or “6 traps” that your contracts:
1. Cannot be enforced, either in whole or part which could cost your business money;
2. Contain terms and conditions that are no longer relevant;
3. Contain terms and conditions that are illegal under the new laws, for which penalties/ other sanctions may be imposed;
4. Do not allow you to exercise certain rights that may otherwise be available to you under the new laws;
5. Do not make it as easy to recover monies owed to you by the client/ supplier/ head contractor etc., as it may otherwise have been under the new laws;
6. Are generally inadequate in protecting your business
How to stay up to date
You need to ensure that you remain informed of relevant changes in the law and how this may affect your particular business. Two ways you can do this are through Industry Associations and Government websites.
Then you need to ensure you seek legal advice from a specialist Business Law firm as to how the changes affect your contracts. If changes to your contracts are necessary, these should be made immediately to minimise falling into the “6 traps” above as a result of the new laws.
How Watkins Tapsell can help
We help our clients take a proactive approach, rather than realise the contracts are out of date when a dispute arises through two services:
1. The Business Contract Audit, to review what contracts you have in place and assess whether they have taken into account current legislation. Then we recommend and prepare amendments to make sure you are protected
2. The Bi-annual Business Contract Review which is an effective way to ensure your contracts are up to date.
Please contact our Commercial Business team to discuss any changes you may be concerned about, our Business Contract Audit or Bi-annual Business Contact Review.