Huntley Legal's Blog

After running a training session, Sarah gave her client online access to the course materials under an agreement that it was for his personal use only. Over the next few weeks, he logged in from 20 different PCs on 20 different occasions, and Sarah realised they were unofficially sharing her materials with their colleagues. She has now had to close her client's account.

Any agreement has to make clear what's included, how many users are entitled to access the product or service, and what will happen if the agreement is broken.

With software, there are three types of licence:

Preparing to sell your business is a bit like the dating game – it's not wise to give everything away too quickly.

Things might be going well in the early stages of preparing to sell your business, and you might be flirting with one or more suitors, but first you really need to set up a Non-Disclosure Agreement (also known as a Confidentiality Agreement) with properly protective terms.

This article explains why.

Things change constantly in the business world, and it's easy for your terms and conditions to go out of date.

But it's dangerous.

People are always changing things but they rarely update their T&Cs.

If you put your T&Cs together a while ago, your business model, products or service offering might have evolved since then.

If your company has asked you to give a personal guarantee, there are a number of important things to think about.

What is a personal guarantee?

A personal guarantee is when you agree to take personal responsibility for repaying company borrowing if the company defaults.

Lenders and suppliers often need financial security as well as your company’s agreement that any loan or credit will be repaid. They will only lend or extend credit if someone also promises to pay up personally if the company can't afford to or fails to. They will usually accept you as a guarantor if you have enough assets and/or a good payment history.

We're into a new tax year, and this is often the time when businesses review their prices and terms of trading. You may be considering changes to improve your profit margin, manage liabilities, or face new risks.

It's easy enough to update your terms for new business-to-business customers, or where the agreements are only for short periods so can be replaced easily, but with longer term agreements, you have to think carefully how to go about changing the agreement you have with existing customers.

It is possible to change the terms you offer, but – just as when you drew up the original agreement – any changes should usually be mutually agreed. This can be done verbally or in writing.

Some people have comfortable assumptions – but when leaving an LLP, it would not be smart to just hand in your notice and go, assuming you will get the profits and capital you hope for.

There are various things to think about when preparing to leave an LLP, just as though you were a director or shareholder leaving a company. Here are some of them.

Businessmen MacInnes and Gross had an informal discussion over dinner in a restaurant.

According to MacInnes, they agreed that he would provide services to Gross with the aim of maximising Gross's return on the sale of his business. The following day, MacInnes emailed Gross setting out what he called an agreement “on headline terms” between the parties.

About nine months later, when a possible sale began to materialise, MacInnes emailed Gross again, forwarding his earlier email and stating that it was important that the parties were “completely aligned”.

Gross replied that they needed to make a “proper contract”.

After the sale of the business, MacInnes demanded EUR13.5 million as payment for his services, relying on the alleged contract between the parties.

The High Court decided that, due to the language used in the emails, the terms of the contract were too unclear to be binding and the parties did not consider themselves to be contractually bound.

Take the challenge

It can be challenging to unpick whether or not business communications are legally binding.

Do you know the answer to these questions?

We wrote recently about the stats big companies will be forced to share from April, so that small suppliers can see their standard payment terms, how often they vary them, and whether or not they stick to them.

In essence, it's a public 'name and shame' scheme intended to prompt big companies to pay small ones faster, and so help keep cash flowing round the economy.

The emphasis is on big companies to publish their data, and small companies to use the data to make informed decisions about negotiating or walking away.

However, publishing the information about payment behaviour is not the whole story.

Many clients come to me having signed a confidentiality agreement. As long as it's labelled 'NDA', it looks innocuous. They feel relaxed and cosy so don't really read it.

But sometimes a Non-Disclosure Agreement is not exactly what it says on the tin.

In most cases the agreement is appropriate – but not always. The biggest glitch is when an NDA only protects the other side when it's just as appropriate for you to have protection too.

If someone asks you to sign an NDA, here are some of the things to check.

Small suppliers can suffer badly when large clients keep them waiting for payment. Payment terms can be frustrating when it seems to be 'their way or the highway'.

For example, many corporates set 60-day payment terms starting from the end of the month in which the invoice is received. In effect, this can be up to 89 days – which can be painful for their suppliers' cashflow.

New regulation means that big companies will have a duty to report their payment practices and performance. This will empower small businesses to negotiate, and give them the opportunity to walk away.