For the next part of the Berry Smith ‘Startup Advice’ mini-series, the team has put together a list of the essential contracts which every startup business should consider having in place. Regardless of the type of business you run, ensuring you have acquired the necessary contracts from the offset is a fundamental factor in achieving success and avoiding any unnecessary issues.

Contracts provide multiple important purposes. They’re a record of what you and the person you’re working with have agreed, they help to ensure you are compliant with the law and they help you to avoid misunderstandings that could lead to costly disputes. Contracts can also provide protection to you if the person you’re working with doesn’t comply with what was agreed, tries to steal your ideas, poaches your staff or doesn’t hold up their end of the deal.

The following is a list of key contracts for your business to consider.

Terms and Conditions

Whether your business provides goods or services, a set of Terms and Conditions will set out how you conduct your business. When provided at the outset of a transaction, they provide your customers with details of how you will supply your goods or services. They set out the responsibilities of each party as well as their rights and obligations and, if drafted correctly, can limit your financial exposure and exclude certain liabilities. In addition, they can be used to standardise your procedures, enabling you to trade with your customers on consistent terms whilst avoiding the time and expense involved in drawing up specific terms for individual transactions.

It is important that your Terms and Conditions are tailored to your business, to provide you with any necessary protection. If you already have a set of Terms and Conditions in place, we advise reviewing them every four to five years, at a minimum, to ensure that they are applicable and up-to-date.

Confidentiality Agreements

Confidentiality Agreements, also referred to as Non-Disclosure Agreements, are contracts with the ability to protect commercially sensitive business information such as trade secrets

In the process of starting your business and building new relationships, there are times you have to share confidential information with third parties. Prior to this, putting in place a Confidentiality Agreement is vital as it will state that certain information provided is to be kept secret and, if the recipient breaches confidentiality, you can claim compensation. This will protect any proprietary information which is crucial to the success of your business.

Website Agreements

If your business has a website which is accessed and used by customers, this can create a number of legal issues for you to consider addressing. We suggest including an accessible Website Terms of Use and Privacy Policy on your website to ensure you are compliant with the law and to protect your intellectual property rights.

There are laws and regulations in place in the UK to protect consumers, for example when they are making purchases online there are ecommerce regulations, Distance Selling Regulations and the Data Protection Act in place to provide protection. Having a Privacy Policy in place can show that you are compliant with these laws. If you collect data from your customers, such as their names, email addresses, or phone numbers, then you are collecting personal data and must comply with the Data Protection Act 2018. If you fail to do so, your business is at risk of being sued.

In addition, your website will contain your intellectual property throughout, such as your logos, your name and your content. Although this will already be protected through trademarks and copyright, it is still important to have clear intellectual property notices on your website. Including a well-drafted Website Terms of Use on your website can set out the rights you own in the content and what visitors may or may not do with it.

As with your Terms and Conditions, it is vital that these are periodically reviewed as laws and regulations are everchanging.

Employment Agreements

Last but not least, we advise having employment contracts in place for your business. For further information regarding this, please click here.

Berry Smith are experts in Commercial Law and highly experienced when it comes to working with startups and helping them grow. If you require specialist advice on drafting, reviewing and refining commercial contracts, as well as general commercial and business advice, please contact us on commercial@berrysmith.com or 029 2034 5511.