No entrepreneur sets out on his ‘journey of success’ thinking that one day he may be facing the prospect of ‘losing it all’ because he is in dispute with one of his customers or suppliers. However, this can, in reality, be exactly what happens.
Here are some tips for ensuring that your business is ‘fighting fit’ when it comes to preventing disputes, or where they do arise, to ensure that you can succeed in resolving the dispute with the minimum of cost and disruption to your business and personal life.
Have robust contracts and terms and conditions in place, and ensure that those terms and conditions are given to new customers/suppliers at the outset of the business relationship.
Ensure that contracts/variations/terms of business are signed by the authorised signatories of both parties and company stamps applied. Each party should initial at the bottom of each individual page of the contract.
Think about what will happen with your customer/supplier relationship if a dispute arises. Do you want to try to preserve the relationship with the other party during and once the dispute is resolved?
If you have to litigate, where will your judgment/arbitral award need to be enforced if you are successful? Can you recover the costs of litigation/arbitration in the dispute resolution forum you have chosen? All of these points above need to be considered in your contracts and terms and conditions at the outset of the business relationship.
It is not always best practise to have a ‘one size fits all approach to your contracts and terms of business. They should be tailored to suit, amongst other things, the geographical location of the parties, the nature of the transaction and where the judgment/arbitral award needs to be enforced.
Keep accurate records for accounting purposes. Make sure that you send out invoices and account statements in a timely manner. Ensure all business documentation is signed (e.g. proof of deliveries). Put all correspondence in writing (email will suffice) regarding any attempts at collection of outstanding balances or discussions regarding disputes.
Make contemporaneous notes of any telephone conversations that you have with the other party and send an email to them confirming what has just been discussed. Where possible get them to confirm the contents of the discussion by return of email.
Use the services of a reputable lawyer to draft or overhaul your contracts, terms of business and debt collection practises. It is very much worthwhile having all of your ‘ducks in a row’ to ensure that you start out your business ‘fighting fit’ and in the best possible position to prevent disputes where possible, or to be in the position of strength where disputes are unavoidable.
Where a dispute leads to a failure to pay outstanding invoices, use a reputable lawyer to send a Legal Notice to the debtor to chase the debt on your company’s behalf.
If you want to ensure that you have all of your ‘ducks in a row’ in relation to your contracts or terms of business, or if you have an outstanding debt to collect, contact email@example.com and she will be only too happy to assist.
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