How to get your professional or sub contractor terms and conditions reviewed

How to get your professional or sub contractor terms and conditions reviewed…

Here are 4 key items I focus on when undertaking an ‘ANNUAL’ review:

LITIGATION

Putting it simply, at some stage you’re going to get sued!

As a litigation lawyer, the first key document I look at when my client is sued is their terms and conditions.

That document, in most disputes frames the scope of liability and/or allows me to raise arguments in defence of a claim.

To have your terms and conditions tweaked annually in your favour is an unfair advantage…So take it!

SCOPE

When I review terms and conditions annually my focus isn’t starting from scratch, largely the contract will work for its purpose. But in business, the type of work and service change. Plus it usually changes in scope from job to job.

You need to have a mechanism to make sure that the scope of your work done and your contract are consistent.

This can easily be addressed by a scoping letter that is changed for each job. Scope is important, think the scope of your ‘duty of care’ for negligence claims…

I also look at the PI policy of my clients to check that:

• the professional business description (it’s scope) is consistent with all of the work undertaken.
• that all people and entities undertaking the work are listed as insured.
• check exclusions are fit for purpose.

RISK

You should know the likely risks in your profession and or sub segment of your industry.

If you haven’t been sued or don’t know - ask your broker or lawyer. Those professionals routinely deal with the same types of disputes.

It is critical to understand how the common types of disputes unfold to make sure your terms and conditions are fit for your business.

PROCESS & PAYMENT

Payment terms and your process around completing work and getting paid is forever a common ground for a dispute.

Money makes the world go round and also triggers so much of the litigation I see.

Yes, disputes might end up a liability claim but often they trigger over money and payment.

They often start around a lack of clarity on payment process. If your contract is uncertain or unclear or inconsistent with your process - this can trigger a dispute in and of itself.

Don’t leave it to uncertainty, you should deal with these issues in your contract.

Here’s a tip for all businesses to get a focused legal review:

Ask your lawyer for a ‘review of your t’s and c’s focused on liability and payment risk including a review of your website representations and key marketing material and your PI policy’.

Done together and with a good contract already, it shouldn’t take more than five or six hours for a ‘review’. An hour to each review:

• your business and processes in a meeting,
• your website / marketing statements,
• your PI policy and client contract,

and say 2 hours to make some necessary tweaks focused around minimising risk.

It depends on each business but this should cost around $2,500.00 to $3,000.00 plus GST.

This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Tagged as:

• litigation
• corporate law
• insurance law