Small companies often don't have the time to challenge the terms and conditions of big businesses. They often feel intimidated by legal jargon, or those that do understand it believe they can’t change it.
This philosophy results in small companies being exposed to unnecessary risk. A common example would be your potential supplier talks about a mutual partnership and asks you to sign an agreement. Unless you read it would you know that it may expose your company to unlimited liability. On the other hand, in the event of a claim, your suppliers' liability might be less than what you are spending with them. Is that partnership? I am sure some readers may say: “That's precisely why I don't sign agreements”. The trouble here is that if you are supplied with goods or services then the agreement signed is likely to stand in the event of a dispute.
So for all those SMEs out there, perhaps it is worth investing money in getting legal support or training to help you navigate your way out of the contractual pitfalls. As the great Earl Nightingale
said: “Wherever there is danger, there lurks opportunity; whenever there is opportunity, there lurks danger. The two are inseparable.”
Before cracking open the champagne and signing the contract, safe in the knowledge the deal is destined to gather dust in the drawer or hard drive, think about the financial risk you might be signing your company up to.
Investing a little time up front will help you understand and minimise the risk – guaranteed.
☛ Phil Machin is director at Bridge Procurement and previously held senior procurement roles at Burberry and COLT Telecommunications