Tactics for getting a deal done and a contract in place

In the current economy, it’s more important than ever to keep business momentum. Whilst there are a range of legally enforceable contract types, the type of documentation you use can often influence how quickly a deal gets done.

Types of contract documentation

Whether you are a customer or supplier, a signed contract protects you by defining the detail and extent of the goods and services to be supplied as well as the cost and timings.

However, the practicalities and perceived complexities of creating and documenting a contract can sometimes jeopardise the “deal” and the relationship between customer and supplier.

A contract can be formed and established by various formats of documentation:

  1. A quotation subject to Incorporated Terms and Conditions issued by a Supplier and signed and accepted by a Customer.
  2. A Purchase Order subject to Incorporated Terms and Conditions issued by a Customer and signed and accepted by a Supplier.
  3. A Single Contract Document signed by both parties.
  4. A Framework/Master Services Agreement establishing a relationship with individual projects documented by a Statement of Work/Scope of Work.

It is dangerous to allow a series of emails or exchanges over a period of time to be interpreted as a contract between the parties, especially as provisions and Terms and Conditions may be implied rather than specified and therefore be to one party’s disadvantage.

All contracts primarily define the products/services to be supplied/purchased, the price and timescales and the respective obligations of the parties.

Within the structures of a Purchase Order/Terms and Conditions or a Quotation/Terms and Conditions the details of product/services, price and timescales will usually describe and define on the front of the paperwork with the standard Terms and Conditions attached.

In a Single form of Contract, the standard provisions are likely to be at the beginning of the document and the details of the product/services, price and timescales are contained in Schedules towards the back.

The Psychological Effect

In our experience, whilst all of the above forms of contract are legally enforceable, the type of document you use can make a big difference in how quickly a transaction is completed. In order to more speedily engage in a contract, there is some psychology, and tactics, that can be considered.

If you are a supplier or a customer who wants to get a contract in place without delay, then you need to decide if:

  1. the subject matter of the goods and services that you are supplying or receiving sit at a level of specification price and volume which would be best suited to a more formal contract document or a front sheet purchase order/quotation with Terms and Conditions attached
  2. the individuals with whom you are negotiating, and their status, suggest that a single document or PO quotation may be more quickly signed off. You need to consider in making this assessment whether those individuals have the ability to sign off or whether it would be passed to procurement or a legal department.

How we can help

Whatever form of contract you use, it should add clarity and visibility to a transaction, and reflect your business. Our commercial team can help draft, review and negotiate a range of commercial agreements and advise on your contract approach to best improve the efficiency of getting contracts signed. If you would like to know more about the contracts you should have to protect your business, please contact Malcolm Head on Tel: 0118 920 9490 or Email: malcolm@thpsolicitors.co.uk