As the weather improves, with Summer not far around the corner, the time pressures on agricultural businesses are becoming greater and you can be forgiven for not reading the small print when purchasing goods and equipment or providing services or products. You may even rely on a handshake and create an oral contract. This may well be okay if everything goes to plan but what happens in the event of a dispute?
Whilst it is not possible to cover every situation and there are always going to be some disagreements, the cost of rectifying or dealing with any dispute can be eye-wateringly expensive, damage relationships and take up a considerable amount of your time. It is therefore essential that you understand your rights and obligations under the contract, are happy that it achieves your objectives and clearly defines what happens in the event of a dispute.
For NFU members alone, the number of cases involving contract disputes is rising year on year, with the cost of rectifying these being approximately £700,000 three years ago, and more likely to be closer to £1 million currently. A lot of these claims could have been avoided or resolved more quickly if the contracts had been reviewed by a professional adviser before they had become binding.
To try and minimise the costs and stress of contract disputes, the NFU runs a Contract Checking Service through its Legal Panel firms. This means that you can bring your contract to a professional adviser who will confirm what the contract means and whether or not it meets your requirements, before you commit yourself by signing on the dotted line. This can cost from as little as £275 + VAT depending on the type of contract and what may be involved, and if any further work is required to rectify the contract, this will be confirmed to you and charged for at the solicitor’s hourly rate (subject to any further NFU discount). There is also the possibility that if you also subscribe to the NFU’s Legal Advisory Service, then the NFU will contribute £250 towards these costs.
Some of the main areas for consideration in a contract include the length of the contract and whether or not this can be terminated or shortened in any way; what price is to be paid and when and under what conditions; is there an exact definition of what goods/equipment/services are to be provided so that there cannot be any misunderstanding; and correctly defining the parties to the contract.
There is also a tendency to accept those terms and phrases which just appear to be ‘legal jargon’ but if there is any doubt as to what these might mean, then it is much better to receive professional advice on the same, to give piece of mind. After all, if they did not have any effect, then they would not be in the contract.
As one of the two Legal Panel solicitors for the NFU in this region, NFU members can contact the team at Crombie Wilkinson to take advantage of the Contract Checking Service. This runs in conjunction with a free Legal Health Check offer also provided through NFU membership and which entitles members to have a Legal Panel solicitor review their farming/growing business and identify and highlight any legal concerns that there may be. As with the Contract Checking Service, recommendations can then be made and acted upon.
For more details on the above, please contact one of our Agricultural team who will be more than happy to assist on 01653 600070.