Running your business

Running your business

 

When you are running your business, you want to be focused on the things that make you money, and not worrying about non-core functions such as legal. That being said having an understanding is key. 

This section covers a number of different legal matters that might come up while you are running your business.

Hiring & Managing employees
Hiring & Managing employees

Find great staff, nurture them and build a great team.

press to zoom
HR Policies
HR Policies

Stay legally protected.

press to zoom
Protecting your IP
Protecting your IP

"Kill Piracy;Save Creativity" K.C.Kankanla

press to zoom
Business Relationships
Business Relationships

Building solid, lasting business relationships.

press to zoom
Running an online business
Running an online business

Making your online shop legally compliant.

press to zoom
Buying & Selling Goods and Services
Buying & Selling Goods and Services

Are you ticking all the right boxes?

press to zoom
Managing a company
Managing a company

Get your business under control

press to zoom
Settlement agreement and references
Settlement agreement and references

What is a settlement agreement?

press to zoom
Commercial notices
Commercial notices

Get it right first time!

press to zoom
Sale and purchase of Commercial Property
Sale and purchase of Commercial Property

Pragmatic, strategic, commercial and forward-thinking.

press to zoom
Letting a commercial property
Letting a commercial property

Solid legal support for your business.

press to zoom
Buying and Selling a business
Buying and Selling a business

Expert down to earth legal advice.

press to zoom
Operating as a sole trader
Operating as a sole trader

Business basics for sole traders.

press to zoom
Health and Safety
Health and Safety

Laying down the ground work.

press to zoom
Negotiating an existing agreement
Negotiating an existing agreement

Changing a contract.

press to zoom
Managing employee performance
Managing employee performance

Empower your team.

press to zoom
Reorganisation and Redundancy
Reorganisation and Redundancy

Preparation is key.

press to zoom
Planning & Highways
Planning & Highways

Do i need permission or not?

press to zoom
 

Hiring & Managing Employees

Consultancy agreement


What is it?

A consultancy agreement is a contract between a self-employed person (Consultant) and a customer requiring the consultant’s services.

It is similar to the standard contract used to hire a freelancer. This agreement clarifies the basic terms of your relationship with the freelancer eg the work to be done, fees payable and other terms of the agreement eg a non-solicitation clause, confidentiality clause, data protection, ownership of any intellectual property created by the freelancer, indemnification clause for any losses you incur due to the freelancer’s breaches of third party intellectual property. Etc.

Why is it important?

More specialist freelancers may want you to sign up to their own bespoke terms and conditions when you instruct them. If that is the case you must ensure that you check all the clauses carefully to ensure that they do not conflict with your requirements and that you are happy with the terms eg consultant to be liable for breaches of your Intellectual property and third party intellectual property, confidentiality, fee payable, data protection, indemnification clause etc.

Risks

You should also ensure that you are aware of the IR35 tax rules. If a freelancer is providing services to you through a company your arrangement may be subject to the IR35 tax rules. This means that the freelancer may have to pay tax and national insurance as if they were employed by you. HMRC has a useful tool at www.gov.uk to enable businesses check employment status for tax purposes.

From April 2020 if you are a medium or large business the responsibility for determining whether the IR35 tax rules applies to the consultancy and for payment of the income tax and national insurance on behalf of the freelancer lies with the company to whom the freelancer provides the services. If you are a “small business” (i.e. a business which satisfies two or more of the following requirements – i) a turnover of £10.2 million or less, ii) no more than 50 staff and iii) a balance sheet f no more than £5.1million the responsibility for determining whether the IR35 tax rules apply and for payment of the tax and national insurance lies with the freelancer.




Home/Office rental agreement


What is it?

A home office rental agreement is an agreement between an owner or lessee of property to share their home office space with another person. These agreements are usually used by start-ups and home-based businesses and will be in the form of a licence agreement. The licensor will be the owner or tenant of the property and the licensee will be the sharer who may be an individual or a company. If more than one individual sharer it is essential that they be all named on the agreement so that they remain jointly and severally liable under the rental agreement. The licence fee should be inclusive of the service costs eg internet, utilities, etc.

Risks

If your business is a lessee, you must check your lease and check with your landlord to ensure that the grant of a licence to the sharers will not be a breach of your obligations as a tenant.




Purchase order


What is it?

A purchase order is prepared by a buyer when the buyer orders goods or A purchase order is prepared by a buyer when the buyer orders goods or services from a seller. The purchase order will indicate the type of goods, quantity of goods and the price the buyer is willing to pay for the products and or services.

Once the seller accepts the purchase order it becomes a legally binding contract as the seller has agreed to sell the goods and or services at the prices put forward by the buyer. The seller will then issue an invoice to the buyer based on the purchase order.

Why is it important?

Purchase orders are important for businesses as it is instrumental in tracking expenditure, makes orders easier to track, helps avoid audit problems and provides contractual legal protection for the buyer and the supplier.

Risks

Alongside a purchase order system, it is vital that a company has strong credit management practices to safeguard cash flow from bad debts and late payment.A strong debt collections process is vital to ensure payment is made when the goods or services have been delivered.

Invoice promptly and accurately and chase up with reminders. If a customer will not pay or ignores payment requests take action – Appoint a debt collection agency, take debt recovery action through the courts or pass the debt to a solicitor.

Pure Business Law has experienced debt collection lawyers who can assist you with debt recovery.





HR Policies

Joint Venture Agreement


What is it? This agreement is needed when two or more parties decide to engage in a business collaboration to deal with a particular project. There are two main types of joint ventures: i) A contractual joint venture is a contract between two parties who are looking to work together on a commercial project and pool their resources but do not want to create a separate legal entity such as a joint venture company or an LLP.(eg two businesses collaborating to bid for a contract or carry out research and development) . The collaboration will be generally be short term or for a defined period and will be of restricted scope with a well-defined purpose. ii)A corporate joint venture is a contract between two parties looking to work together on a commercial project where they will both set up a separate company (“a joint venture company”) separate from their current operations, own shares in it, have representatives from each of the companies sitting on its board and or want their company to have limited liability for the debts and obligations of the joint venture. This type of joint venture is usually suitable if you will be collaboration on a longer term project and or your collaboration will be more risky and complex and therefore justifies the time and effort of setting up a separate company.




Manufacturing Agreement


What is it? This agreement is needed if you want to employ the services of another company an individual to manufacture goods/products for you for your business. The agreement should cover a number of key areas including manufacture of the goods, materials, specification, quality control, packaging, storage, confidentiality, data protection, insurance, pricing, payment, delivery, title and risk, intellectual property, disputes, force majeure, service of notices, liability and indemnity clauses.




Memorandum of Understanding


What is it? An MOU is a pre-contract, non-binding document setting out the key terms agreed by parties who intend to enter into a binding contract. It is also known as Heads of Terms, a Letter of Intent or a Term Sheet. It is a useful tool when two or more parties intend to enter into a future contract and want to identify, describe and agree, without it being contractually binding, the terms to be further negotiated and then recorded in a contractually binding contract. There will occasionally be statements in a MOU which are exceptions to the general approach that a MOU is not binding : this will occur if the parties put in statements which the MOU expressly states are to be of legally binding effect until a definitive contract is signed. If that is the case those statements will generally be binding. Why is it important? An MOU is useful to set out the progress made during negotiations, reduce the potential for misunderstandings, indicate the major issues which still need to be resolved and make it clear what the parties intend when they enter into the contract. Risks The disadvantage of a MOU is that it can take up a considerable amount of time and may distract the parties from working on negotiating a full and detailed binding contract. There have been occasions when the parties to a proposed commercial arrangement never actually agree or sign a definite contract and have gone on to implement their deal based only on the MOU. This creates a very uncertain legal position which may lead to disputes and legal problems.




Agency Agreement


What is it? The term “agent” is often used as shorthand in a business or legal context to mean a person authorised to act for or on behalf of another who is sometimes called the “principal” As a business you need to be able to distinguish whether or not a particular arrangement amounts to a commercial agency rather than another kind of agency or relationship. This is vital if you are to understand the various legal obligations, duties and liabilities that you owe your contractors/ agents and vice versa. There are different types of individuals and companies which describe themselves as “agents”. These include for instance – commercial agents, sales agents. Employment agents, escrow agents etc. Why is it important? A commercial agent is a kind of sales agent whose relationship with their principal is largely governed by the Commercial Agents (Council Directive) Regulations 1993 whereas the relationship between any other type of sales and their principal is largely governed by the common law and not by the Regulations. A “commercial agent” is defined by the Regulations as a “…self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of their principal or to negotiate and conclude such transactions on behalf of and in the name of that principal”. Risks All commercial agency arrangements must comply with the Commercial Agents Regulations 1993. In accordance with the European Withdrawal Act 2018( ad subject to the terms of any final Brexit deal) the Regulations will remain in force post-Brexit.In contrast a sales agent is a freelance self-employed individual or contractor who may or may not work for numerous clients. You need an Agency Agreement if you want to appoint a third party to act on your behalf, marketing and selling your products and services – generally in exchange for commission on any sales. An agency agreement sets out the terms and conditions of the relationship, the commission or fees the notice period and any exclusivity rights. Other ways in which a business can expand without considerable outlay are via a distributorship and a franchise. In contrast to a distributorship, an agent earns commission on sales but does not pay for the goods, own the goods or set the sale price charged to the customer.




Referral Agreement


What is it? A referral agreement is used where, in order to obtain more customers and sales and widen Business A’s customer base or sell into a new market, a supplier of goods or services (Business A) wishes to engage another person or business (Individual B or Business B) to effect an introduction/referral of new customers to Business A in return for which the agent receives a fee for the introduction/referral itself or for the introduction/referral where it results in a sale within a stated period after the introduction/referral. It is also known as an Introduction agreement. Examples of referrers/introducers are agents who introduce a seller of a business to a potential buyer or who introduce a potential investor to a business. Why is it important? If a business colleague is referring work to you or you are the referrer you should get a referral agreement that sets out the terms of your agreement. This will help avoid problems. A referral agreement can also be used where an e-commerce website wishes to increase its sales by allowing other websites to refer customers to them in return for a commission on sales obtained through such referrals. The fees can be either a fixed fee or percentage basis with payment when the referral is made or upon the first transaction or both. The fees and payment clause can be drafted so that if the refer fails to introduce any new business they will not get a fee.There are specific referral agreements for the introduction of clients for financial services eg investment advice and insurance products.




Licensing Agreement


What is it? There are numerous types of licensing agreements eg IP licensing agreement eg a trademark licence agreement, a licence to occupy property, a software licence agreement etc.A software licence agreement is an agreement between a software licensor (generally a software developer and/or owner) and licensee who will be using the licensed software in the course of a business or personally. Why is it important? We always recommend that our clients get a licensing agreement if for example they want to give a person or another business the right to use their technology, software or any other type of intellectual property. A software licence will set out what the user may or may not do with a piece of software thereby helping developers ensure that they maximise returns on their investments, restrict others from free use of their creative and inventive work and product software that remains stable across a broad range of computer systems.




End User Licence Agreement


What is it? This is a licence agreement between a software provider and a user where software is distributed en-masse through retailers or electronically eg Microsoft and people who use its software. The different types of end-user licences include a Web Wrap software licence (designed for use with software that is distributed electronically via download ) Click Wrap Licence (designed for use with software that can be distributed electronically via download or on physical media such as a CD or DVD-Rom, Shrink Wrap Licence (designed for use in or on the packaging of software that is distributed on physical media such as a CD or DVD-Rom).




Service Level Agreement


What is it? Businesses often seek to obtain services from other businesses for various reasons. In some cases, a simple service agreement is all that is needed especially where the services in question are to be provided over a short term.However, in some cases a long-term relationship and the need for service consistency is essential. In such cases a business owner may prefer to enter into a Service Level Agreement with the service provider. Why is it important? Commonly used in the IT & Technology industries, but also applicable in other areas of business especially where large-scale or complex services are involved Service Level Agreements set out the services to be provided under a contract and also sets out the levels of performance to which those services must be provided. Detailed provisions govern the monitoring of the performance of the services and the agreement. Risks The service provider is thereby incentivised to consistently provide services in line with the agreed performance levels. If it fails to meet the agreed service levels it is subject to penalties. Service level agreements are preferable to standard service agreements as they contain much more detail, enhanced clarity and accountability over and above standard service agreements.




Partnership agreement


What is it? There are 2 main types of partnership agreements: An unlimited partnership – This is a relationship between two or more parties carrying on business together to make a profit. It is usually referred to as a “partnership” or a “general partnership” to distinguish it from other types of partnership such as a limited liability partnership. A partnership can arise by law even if there is no agreement in writing and even if the parties did not intend to create a partnership. An unlimited partnership is not a separate legal entity unlike a company or a limited liability partnership. Therefore, its partners have unlimited liability for the partnership’s debts. A limited liability partnership – Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement setting out how the LLP will be run.




LLP agreement


What is it? This agreement applies when you have a limited liability partnership. Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. Why is it important? The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement (LLP Agreement) setting out how the LLP will be run.




Distribution agreement


What is it? A distributor buys goods from a supplier to sell on to customers. They can earn a profit margin based on the “mark-up” they add to the original sale price. A Distributorship agreement is an agreement whereby the manufacturer appoints the distributor on a “sole” or “non-exclusive” basis) to resell the manufacturer’s products in a particular territory/ies. In this case, the ownership of the goods is transferred to the distributor prior to the marketing and sale of the goods which means that the distributor may hold stocks of goods which they pay for and own – they therefore bear the risk as to whether they can resell the goods. There are different types of distribution agreements eg exclusive, sole and selective distribution agreements. Business relationships can sour if based on verbal agreements. Protect your rights by ensuring you have a written distribution agreement.




Model release letter


What is it? A signed Model Release Form protects your profit margin and your copyright. Whether you work in a marketing business graphic design or are a commercial vlogger or blogger you need to ensure that any photographs that you use in your business has a properly signed release form. Whilst you do not generally need written permission to take photos, if you take photos and wish to publish the photos on the internet or in any other way or if you are starting a photography business you can protect yourself from any liability or legal proceedings by using a Model Release Form or Letter. A Model Release Form is the contract between the photographer or User and the “model” (i.e. the subject or owner of the image or photograph). Designed to protect both parties it specifies the ways in which the images or models can or cannot be used (eg for advertising, to make prints, post on social media etc), the media formats, the use or not of the model’s name, the model’s rights (or not) to inspect the end product before publication and the expiry (or not) of the release. Why is it important? A Model Release Form is not about obtaining permission to take photographs – it is about obtaining signed consent to publish the photographs for commercial purposes. Whilst it is generally okay to take pictures of a person or people in a public place without written permission if you want to use that photo for specific commercial purposes eg to promote a product on the internet or elsewhere it is best to be safe and get a signed release form from the “model” or owner of the “model”. Risks But do get legal advice before you use a release form template as it may need adapting to fit your particular needs.And remember! If you want to use images for a purpose not originally agreed, you MUST get further signed consent.




Sales agency agreement


What is it? If you are a business selling products you may decide to employ the services of a sales agent. A sales agent is a freelance self-employed business or contractor who might or might not work for several clients. The term “sales agent” includes a “commercial agent” but it is usual to distinguish the two forms of agency by referring to someone as a sales agent only if they are not a “commercial agent” as the legal position of a “commercial agent” differs substantially from other forms of “sales agency”. The business that owns the products will be called the “Principal” and the sales agent will be called the “Agent”. The sales agent is paid commission only and so is motivated to make as many sales as possible to maximise their income.Central to the relationship between a business and their sales agent will be the “Agency Agreement”. The Sales Agency agreement will set out the product the agent will be selling, where the agent will be selling those products, how the sales are to take place, commission payable on all sales and the key rights and responsibilities of the parties. Why is it important? The use of sales agents as opposed to an employed sales team has a number of benefits for the business (i.e. the “Principal”) since commission is only payable on achieved sales, there are no fixed employment costs, and the agent will often already have a network of contacts ie established customer base, will know the market in their area and will have credibility with their customer base.




Sub-contracting agreement


What is it? Many business contracts allow one or both parties to sub-contract all or part of their obligations under a contract. This can be done via a letter termed a “Notice of Intention to Sub-contract” from the main contractor to the other party to the main contract or via a formal “Sub-contracting” agreement. Where a “Notice of intention to sub-contract” letter is used, the main contractor (ie sender of the letter) would inform the other party to the contract (ie the recipient of the letter) that the main contractor intends to subcontract certain of their obligations under a contract and will provide details of the subcontractor(s) to whom the obligations will be sub-contracted, a detailed description of the obligations to be sub-contracted with cross-references to the relevant parts of the Contract agreement between the main contractor and the other party to the contract agreement. The recipient will also be reminded that they are not a party to the sub-contract and that the main contractor will remain their primary contact person and will also remain liable for any acts of omissions of the subcontractors. As an option, the main contractor may also decide to enter into a formal “Sub-contracting” agreement with the sub-contractor and send a copy of this to




Franchise Agreement


What is it? Franchising your business lets you licence your business model to companies or individual in particular geographical areas and allows you to increase your profits while maintaining a significant degree of control over your brand. A Franchise agreement is an agreement under which the owner of a business grants a licence or licences to others (the “franchisees”) to operate that business in a particular area within the UK or internationally either on a “sole” or “non-exclusive” basis, for a fee therefore spreading their corporate identity and products or services without the expense of setting up new establishments. All franchisees will use a common identity including the name, trademarks, goodwill, other intellectual property and or products of the franchisor. The franchisor will also provide a “Quality Manual” which in effect is a rule book setting out all the relevant detail needed for the successful day-to-day running of the franchised business eg minimum standards and insurance requirements. The agreement will usually include a confidentiality clause protecting all commercially sensitive information and trade secrets from unauthorised disclosure thereby protecting the interests of the franchisor. Why is it important? Franchising has benefits for the franchisor and the franchisee. The franchisor can grow its business without having to open, staff and manage new premises or branches itself whilst the franchisee can manage his/her own business which has been already tested by the franchisor and has access to the franchisor’s experience and expertise. McDonalds and Kentucky Fried Chicken (KFC) operate their own restaurants and food outlets but also grant franchises to others to operate McDonalds and KFC businesses using their logos with McDonalds and Kentucky Fried Chicken exercising tight quality control over the restaurants, their location, food, health and safety etc.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


Protecting your IP

Consultancy agreement


What is it?

A consultancy agreement is a contract between a self-employed person (Consultant) and a customer requiring the consultant’s services.

It is similar to the standard contract used to hire a freelancer. This agreement clarifies the basic terms of your relationship with the freelancer eg the work to be done, fees payable and other terms of the agreement eg a non-solicitation clause, confidentiality clause, data protection, ownership of any intellectual property created by the freelancer, indemnification clause for any losses you incur due to the freelancer’s breaches of third party intellectual property. Etc.

Why is it important?

More specialist freelancers may want you to sign up to their own bespoke terms and conditions when you instruct them. If that is the case you must ensure that you check all the clauses carefully to ensure that they do not conflict with your requirements and that you are happy with the terms eg consultant to be liable for breaches of your Intellectual property and third party intellectual property, confidentiality, fee payable, data protection, indemnification clause etc.

Risks

You should also ensure that you are aware of the IR35 tax rules. If a freelancer is providing services to you through a company your arrangement may be subject to the IR35 tax rules. This means that the freelancer may have to pay tax and national insurance as if they were employed by you. HMRC has a useful tool at www.gov.uk to enable businesses check employment status for tax purposes.

From April 2020 if you are a medium or large business the responsibility for determining whether the IR35 tax rules applies to the consultancy and for payment of the income tax and national insurance on behalf of the freelancer lies with the company to whom the freelancer provides the services. If you are a “small business” (i.e. a business which satisfies two or more of the following requirements – i) a turnover of £10.2 million or less, ii) no more than 50 staff and iii) a balance sheet f no more than £5.1million the responsibility for determining whether the IR35 tax rules apply and for payment of the tax and national insurance lies with the freelancer.




Home/Office rental agreement


What is it?

A home office rental agreement is an agreement between an owner or lessee of property to share their home office space with another person. These agreements are usually used by start-ups and home-based businesses and will be in the form of a licence agreement. The licensor will be the owner or tenant of the property and the licensee will be the sharer who may be an individual or a company. If more than one individual sharer it is essential that they be all named on the agreement so that they remain jointly and severally liable under the rental agreement. The licence fee should be inclusive of the service costs eg internet, utilities, etc.

Risks

If your business is a lessee, you must check your lease and check with your landlord to ensure that the grant of a licence to the sharers will not be a breach of your obligations as a tenant.




Purchase order


What is it?

A purchase order is prepared by a buyer when the buyer orders goods or A purchase order is prepared by a buyer when the buyer orders goods or services from a seller. The purchase order will indicate the type of goods, quantity of goods and the price the buyer is willing to pay for the products and or services.

Once the seller accepts the purchase order it becomes a legally binding contract as the seller has agreed to sell the goods and or services at the prices put forward by the buyer. The seller will then issue an invoice to the buyer based on the purchase order.

Why is it important?

Purchase orders are important for businesses as it is instrumental in tracking expenditure, makes orders easier to track, helps avoid audit problems and provides contractual legal protection for the buyer and the supplier.

Risks

Alongside a purchase order system, it is vital that a company has strong credit management practices to safeguard cash flow from bad debts and late payment.A strong debt collections process is vital to ensure payment is made when the goods or services have been delivered.

Invoice promptly and accurately and chase up with reminders. If a customer will not pay or ignores payment requests take action – Appoint a debt collection agency, take debt recovery action through the courts or pass the debt to a solicitor.

Pure Business Law has experienced debt collection lawyers who can assist you with debt recovery.





Business Relationships

Share Purchase Agreement


What is it?

A Share purchase agreement (SPA) is an agreement setting out the terms and conditions relating to the sale and purchase of shares in a company. Share purchase agreements are often complex documents which can become lengthy and create significant delay, friction and cost if not dealt with by experienced, business minded lawyers.

Why is it important?

There is often a choice and negotiation over whether it’s best for either or both parties to buy/sell assets rather than shares. This would depend on whether the current owner (seller) is a limited company. If not, there can be no share sale! Further, where a buyer wants to preserve as many customer relations as possible, they may elect to buy the shares as opposed to assets.

The seller’s solicitor usually draws up the draft share purchase agreement.

Risks

While the buyer’s solicitor will try to protect the buyer the interest of the seller’s solicitor is to minimise this protection, in particular by limiting the seller’s liability for misrepresentation. However, in practice, where there is fraudulent misrepresentation the seller will still be liable so the buyer may accept such clauses since they are not valid if the seller can prove fraudulent misrepresentation.

Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.




Asset Purchase Agreement


What is it?

An asset purchase agreement is an agreement setting out the terms and conditions relating to the sale and purchase of assets of a business. In an asset purchase, the company itself will be selling the assets, whilst in a share sale, the individual shareholders will be the sellers.

Occasionally a buyer will prefer to acquire certain assets of a business rather than acquire all of the shares in a company and therefore, both its assets and liabilities.

A buyer will normally prefer to buy the assets of a business, while the seller will prefer to sell the shares. The main benefit of an asset purchase is that a buyer may selectively pick the assets and liabilities they want to acquire and there is generally less risk of hidden liabilities than with a share purchase.

Risks

The main disadvantage of an asset sale, as opposed to a share purchase agreement is that each item must be transferred in accordance with its proper rules and made enforceable against third parties (eg through consents and approvals). This is especially the case for customer contracts, as a third party may view the transaction as an opportunity to renegotiate their contract thereby adding delay and additional costs to the transaction.

In addition, there may be other important contracts that are non-transferrable, or licences and consents unique to the seller which may not be transferrable.

In an asset sale it is vital to identify what exactly is being purchased. Assets transferred as part of an Asset purchase agreement may include:

  • Plant and machinery.
  • Premises;
  • Stock;
  • Contracts;
  • Know-how; and
  • Goodwill.

Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.




Disclosure Letter


What is it?

A Non-Disclosure letter or Non-Disclosure Agreement, also called a Confidentiality Agreement, is a legal contract between two or more parties by which the parties agree not to disclose information (which is intended to be kept secret) that they have shared with each other during a business relationship to third parties.

Why is it important?

This Agreement may either be one-way (unilateral) or two-way (mutual), depending on whether both parties will be providing the secret information. If one party will be providing the secret information to the other, it is called a Unilateral Non-Disclosure Agreement.

For example, where an inventor of an idea is sharing the idea with another person, the inventor is the disclosing party and the other party is the receiving party. If the two parties will share the secret information between themselves, it is called a Mutual Non-Disclosure Agreement.

This Agreement can be used to share intellectual property, share commercial trading information or formalize a business relationship, for example, between an employer and an employee





Running an online business

Share Purchase Agreement


What is it?

A Share purchase agreement (SPA) is an agreement setting out the terms and conditions relating to the sale and purchase of shares in a company. Share purchase agreements are often complex documents which can become lengthy and create significant delay, friction and cost if not dealt with by experienced, business minded lawyers.

Why is it important?

There is often a choice and negotiation over whether it’s best for either or both parties to buy/sell assets rather than shares. This would depend on whether the current owner (seller) is a limited company. If not, there can be no share sale! Further, where a buyer wants to preserve as many customer relations as possible, they may elect to buy the shares as opposed to assets.

The seller’s solicitor usually draws up the draft share purchase agreement.

Risks

While the buyer’s solicitor will try to protect the buyer the interest of the seller’s solicitor is to minimise this protection, in particular by limiting the seller’s liability for misrepresentation. However, in practice, where there is fraudulent misrepresentation the seller will still be liable so the buyer may accept such clauses since they are not valid if the seller can prove fraudulent misrepresentation.

Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.




Asset Purchase Agreement


What is it?

An asset purchase agreement is an agreement setting out the terms and conditions relating to the sale and purchase of assets of a business. In an asset purchase, the company itself will be selling the assets, whilst in a share sale, the individual shareholders will be the sellers.

Occasionally a buyer will prefer to acquire certain assets of a business rather than acquire all of the shares in a company and therefore, both its assets and liabilities.

A buyer will normally prefer to buy the assets of a business, while the seller will prefer to sell the shares. The main benefit of an asset purchase is that a buyer may selectively pick the assets and liabilities they want to acquire and there is generally less risk of hidden liabilities than with a share purchase.

Risks

The main disadvantage of an asset sale, as opposed to a share purchase agreement is that each item must be transferred in accordance with its proper rules and made enforceable against third parties (eg through consents and approvals). This is especially the case for customer contracts, as a third party may view the transaction as an opportunity to renegotiate their contract thereby adding delay and additional costs to the transaction.

In addition, there may be other important contracts that are non-transferrable, or licences and consents unique to the seller which may not be transferrable.

In an asset sale it is vital to identify what exactly is being purchased. Assets transferred as part of an Asset purchase agreement may include:

  • Plant and machinery.
  • Premises;
  • Stock;
  • Contracts;
  • Know-how; and
  • Goodwill.

Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.




Disclosure Letter


What is it?

A Non-Disclosure letter or Non-Disclosure Agreement, also called a Confidentiality Agreement, is a legal contract between two or more parties by which the parties agree not to disclose information (which is intended to be kept secret) that they have shared with each other during a business relationship to third parties.

Why is it important?

This Agreement may either be one-way (unilateral) or two-way (mutual), depending on whether both parties will be providing the secret information. If one party will be providing the secret information to the other, it is called a Unilateral Non-Disclosure Agreement.

For example, where an inventor of an idea is sharing the idea with another person, the inventor is the disclosing party and the other party is the receiving party. If the two parties will share the secret information between themselves, it is called a Mutual Non-Disclosure Agreement.

This Agreement can be used to share intellectual property, share commercial trading information or formalize a business relationship, for example, between an employer and an employee





Buying & Selling Goods & Services

Licence to assign


What is it? If you are a landlord of commercial property, and your lease to your tenant includes a provision that says that your tenant cannot assign the lease to another (the “assignee”) without your consent and your tenant wants to assign or transfer their lease obligations to another commercial tenant you need a licence to assign to give them your consent. Why is it important? If the lease absolutely prevents assignment, then you can refuse consent without stating a reason. However, if the lease prohibits assignment without the landlord’s consent the landlord must have a good reason for refusing consent. If the tenant considers that the landlord’s reason is unreasonable the tenant can challenge the refusal in court. A tenant’s request to assign the lease may be made orally, by letter or by email as there is no prescribed form for a tenant’s application for consent to assign. A landlord can charge a tenant a fee to register an assignment. Landlords generally insist that the tenant or lessee gives a guarantee (Authorised Guarantee Agreement “AGA”) in the lease to be responsible for any breaches of covenants by the assignee so that the landlord can claim against the original tenant if the assignee breaches any of its obligations under the lease.




Licence to sublet


What is it? A licence to sublet is an agreement between a landlord and a tenant that gives the tenant the right to sublet part or the whole of the property to another tenant (the “sub-tenant”). If the lease absolutely prevents sub-letting, then you can refuse consent without stating a reason. However, if the lease prohibits sub-letting without the landlord’s consent the landlord must have a good reason for refusing consent. If the tenant considers that the landlord’s reason is unreasonable the tenant can challenge the refusal in court. Why is it important? Where there is a sub-lease the sub-lessee’s landlord is the tenant or lessee so if the sub-lessee breaches its obligations under the sub-lease the lessee or tenant is the only person entitled to take action against the sub-lessee. Landlords generally insist that the sub-tenant joins in the licence to sublet so that the landlord can claim against the sub-tenant if there is any breach of its obligations under the sub-lease.




Sale Agreement


What is it? If you are selling a commercial property, we will prepare the sale contract and related documents, deal with all enquiries raised by the buyer’s solicitors, report to you and advise you and once the contract has been agreed, complete the transaction as quickly and effectively as possible.




Purchase Agreement


What is it? If you are buying a commercial property we will review, amend and advise you on the contract, raise all relevant enquiries, conduct searches, report to you, advise you and then once the parties have agreed the contract complete and register the conveyance as quickly and effectively as possible





Managing a company

Consultancy agreement


What is it?

A consultancy agreement is a contract between a self-employed person (Consultant) and a customer requiring the consultant’s services.

It is similar to the standard contract used to hire a freelancer. This agreement clarifies the basic terms of your relationship with the freelancer eg the work to be done, fees payable and other terms of the agreement eg a non-solicitation clause, confidentiality clause, data protection, ownership of any intellectual property created by the freelancer, indemnification clause for any losses you incur due to the freelancer’s breaches of third party intellectual property. Etc.

Why is it important?

More specialist freelancers may want you to sign up to their own bespoke terms and conditions when you instruct them. If that is the case you must ensure that you check all the clauses carefully to ensure that they do not conflict with your requirements and that you are happy with the terms eg consultant to be liable for breaches of your Intellectual property and third party intellectual property, confidentiality, fee payable, data protection, indemnification clause etc.

Risks

You should also ensure that you are aware of the IR35 tax rules. If a freelancer is providing services to you through a company your arrangement may be subject to the IR35 tax rules. This means that the freelancer may have to pay tax and national insurance as if they were employed by you. HMRC has a useful tool at www.gov.uk to enable businesses check employment status for tax purposes.

From April 2020 if you are a medium or large business the responsibility for determining whether the IR35 tax rules applies to the consultancy and for payment of the income tax and national insurance on behalf of the freelancer lies with the company to whom the freelancer provides the services. If you are a “small business” (i.e. a business which satisfies two or more of the following requirements – i) a turnover of £10.2 million or less, ii) no more than 50 staff and iii) a balance sheet f no more than £5.1million the responsibility for determining whether the IR35 tax rules apply and for payment of the tax and national insurance lies with the freelancer.




Home/Office rental agreement


What is it?

A home office rental agreement is an agreement between an owner or lessee of property to share their home office space with another person. These agreements are usually used by start-ups and home-based businesses and will be in the form of a licence agreement. The licensor will be the owner or tenant of the property and the licensee will be the sharer who may be an individual or a company. If more than one individual sharer it is essential that they be all named on the agreement so that they remain jointly and severally liable under the rental agreement. The licence fee should be inclusive of the service costs eg internet, utilities, etc.

Risks

If your business is a lessee, you must check your lease and check with your landlord to ensure that the grant of a licence to the sharers will not be a breach of your obligations as a tenant.




Purchase order


What is it?

A purchase order is prepared by a buyer when the buyer orders goods or A purchase order is prepared by a buyer when the buyer orders goods or services from a seller. The purchase order will indicate the type of goods, quantity of goods and the price the buyer is willing to pay for the products and or services.

Once the seller accepts the purchase order it becomes a legally binding contract as the seller has agreed to sell the goods and or services at the prices put forward by the buyer. The seller will then issue an invoice to the buyer based on the purchase order.

Why is it important?

Purchase orders are important for businesses as it is instrumental in tracking expenditure, makes orders easier to track, helps avoid audit problems and provides contractual legal protection for the buyer and the supplier.

Risks

Alongside a purchase order system, it is vital that a company has strong credit management practices to safeguard cash flow from bad debts and late payment.A strong debt collections process is vital to ensure payment is made when the goods or services have been delivered.

Invoice promptly and accurately and chase up with reminders. If a customer will not pay or ignores payment requests take action – Appoint a debt collection agency, take debt recovery action through the courts or pass the debt to a solicitor.

Pure Business Law has experienced debt collection lawyers who can assist you with debt recovery.





Settlement agreements & Ref

Settlement agreement


What is it?

A Settlement Agreement is a binding contract between an employer and employee which settles claims that an employee may have against their employer. Whilst such an agreement is usually used in relation to be ending the employment it may also be used to settle a dispute that has arisen between an employer and employee where there is no intention by either party to end the employment.

Why is it important?

The terms of the settlement agreement must be mutually agreed between the employer and employee and must include a waiver of the specific claims which the employee has or could have. The agreement should contain a breakdown of the payments which have been agreed and should also state whether any of the payments are to be paid to the employee free of tax. Payments of up to £30k compensation can often be paid without deduction of tax if the payment is being made on an “ex gratia basis” (i.e. it is a payment you have voluntarily decided to make rather than one that you are legally obliged to make) or as compensation damages for a breach of contract.

Risks?

For a settlement agreement to be legally binding it must meet a number of statutory requirements eg it must be in writing, must specify the particular claims or complaints which the agreement is settling and the employee must have received advice on the terms and effect of the agreement from an independent solicitor or a trade union official whose advice is covered by insurance.

If the settlement agreement does not meet all of the statutory requirements, it will not be binding and the employee can still bring claims against the employer relating to the claims allegedly “settled” by the settlement agreement.It is a good idea to take proper legal advice before you decide to enter into a settlement agreement.

For more information on settlement agreements, contact our employment solicitors




Reference letter


What is it?

A Reference letter is a letter that is usually written to testify to a person’s or (sometimes) a company’s skills, experience, character and or achievements. It is used in various circumstances eg when a candidate applies for a job and needs a reference to support their application, if a job candidate is made a job offer and is asked to provide a reference letter before the contract can be signed, a landlord asks a prospective tenant to provide a reference letter testifying to their character and good financial statues, a student applies for funding and is asked to provide a reference letter or a company applies for a tender and is asked to provide reference letters testifying to their ability to do the job and their trustworthiness.

Why is it important?

A Reference letter is a formal document and should be written in a business-like style. Do not mention any weaknesses that the candidate has or say anything that could be construed as derogatory or libel. If you honestly feel that the applicant has no good qualities or if you have had a dispute with them in the past you should tell them to get a reference letter from someone else. An employer must give a reference if there was a written agreement to do so and they are in a regulated industry such as Financial services.

Risks

You are under no obligation to give a work reference but if you do it must be fair and accurate. Your employee may be able to sue you in court and claim damages if you give a reference, they think is misleading or unfair. To do so the employee must be able to show that (a ) the reference is misleading or inaccurate and (b) they suffered a loss eg a job offer was withdrawn.It is essential that you do not lie in it or you could be sued.

Need some advice? Contact our employment solicitors.





Commercial notices

Notice of breach of covenants


What is it?

This is popularly called a Section 146 Notice (it is a notice required to be served by section 146 of the Law of Property Act 1925 and relates solely to business tenants) that warns a tenant who is in breach of covenant (other than the covenant to pay rent) of the landlord’s intention to forfeit the lease on ground of the breach of covenant.

Why is it important?

“Forfeiture” is the right of the landlord to re-enter the commercial property and take back possession of the property if a covenant has been breached.

For the notice to be valid and binding the notice must specify the breach of covenant and if the breach is capable of remedy , require the tenant to remedy it and pay monetary compensation to the landlord for the breach.

A landlord can only serve such a notice if the lease contains a right to forfeit the lease (i.e. a right of re-entry). The notice must also contain certain prescribed information. If the tenant does not remedy the breach within a reasonable time the landlord can start forfeiture proceedings in the County Court.

Risks

A landlord who wants to forfeit the lease must avoid “waiving” the breach of covenant. Waiver occurs where a landlord becomes aware of a breach of the lease but does not take action against the tenant within a reasonable period or acknowledges the continuation of the lease by for example demanding rent or service charges or accepting rent payments from the tenant.




Break notice


What is it? A Break Notice, also known as a Break Clauses or a break option, is an important contractual provision in a lease which allows either a landlord or tenant to bring a Lease to an early end. Some landlords often have a vested interest in making life difficult for a tenant seeking to exercise its option to break the lease by making the option subject to stringent conditions. Why is it important?

Break Notices are akin to options and are therefore strictly construed by the courts . From the tenant’s perspective, a properly drafted Break Clause gives them the opportunity to avoid being tied into a lease that they can no longer afford. This is a safety-net for a tenant – especially if they are just starting out.

Understandably though, a landlord who is receiving a steady rental income may be reluctant to lose a tenant, particularly in tough economic times.

Risks

Any tenant seeking to exercise the option to break the lease must check the lease carefully and ensure they follow the landlord’s “break clause conditions” to the letter. It is crucial when taking a lease that a tenant understands that the conditions of the Break Clause can easily defeat an option to break unless followed to the letter. If the conditions are not strictly followed the termination is not valid and the tenant remains a lessee until the expiry of the lease, the next break clause date or until the tenant is able to assign the lease with the landlord’s consent if there is such a provision in the lease.

A properly advised tenant should refuse any condition, other than up-to date payment of principal rent and giving up occupation.




Tenant's agreement to exclude security of tenure


What is it?

The Landlord and Tenant Act 1954 provides tenants of business premises with rights of ‘security of tenure’. This means that once a business tenant’s lease expires, the tenant has the right to request a new lease on the same terms as the previous lease (subject to agreement on terms, such as the amount of rent, any legislative updates etc), except where the landlord has a statutory ground to refuse a new lease (for instance, if the tenant has failed to pay rent or the landlord wishes to redevelop the premises).

Why is it important?

When agreeing to enter into a commercial or business lease, one of the things that will be discussed when agreeing Heads of Terms is whether your lease will be ‘protected’ with security of tenure, or ‘contracted out’ i.e. excluded’ from security of tenure. It is quite common for landlords to require that security of tenure rights are excluded from a lease. They do this by asking the prospective tenant to sign a notice in front of an independent solicitor agreeing to the exclusion of security of tenure under the lease.

Risks

This notice means that a tenant of commercial premises will not have the automatic right to request a renewal of their lease at the end of the term of the lease, leaving the landlord free to let the property to another tenant at the end of the term. This is because landlords often wish to retain strict control over the occupation of their property. If security of tenure is excluded, you the tenant, must vacate the property at the end of the lease in accordance with its terms unless you have negotiated a new lease with the landlord separately.




Landlord's notice to exclude security of tenure





Section 25 Notice


What is it?

This is a notice by the landlord under s25 of the Landlord and Tenant Act 1954.

Why is it important?

It allows the landlord to start a procedure which will end either in the tenant being granted a new lease or in the tenant vacating. This notice cannot be given before the last year of the lease terms nor after the tenant has served a request for a new tenancy under s26 of the Act.

Risks

The s25 notice must state the date on which the landlord intends to bring the existing lease to an end.




Section 26 Notice


What is it?

This is a notice given by the tenant requesting a new tenancy upon the termination of the old tenancy.

Why is it important?

The s26 request must specify the date on which the existing lease is to end.

Risks

This notice cannot be served before the last year of the agreed lease term nor can it be served after the landlord has served a s25 notice.




Licence for alterations


What is it?

This is a licence from the landlord to the tenant giving the tenant the right to carry out specific works or alterations to the property that is being let. The alterations may be major or minor.

Why is it important?

The Licence should include provisions as to the manner in which the tenant will carry out the works, timescales, reinstatement and (to the extent applicable) the Construction (Design and Management) Regulations 2015. Drawings and specifications showing the proposed works should be attached to the Licence so that it is clear what the landlord is consenting to.

If the proposed alterations are not substantial (e.g. the erection of demountable partitioning or signage) you can use a simple Letter- Licence to Alter.




Section 27 Notice


What is it? A tenant has the right under s27 of the 1954 Act to bring the tenancy to an end by giving at least three months’ notice before the date on which the tenancy would otherwise expire. If the lease term has expired but the tenancy is still continuing under the 1954 Act the tenant may bring that continuing tenancy to an end by giving not less than three months’ notice in writing to the landlord.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


Letting a commercial property

Commercial lease


What is it? A commercial lease is an agreement between a landlord and a business for the rental of a property for business purposes for a set period in return for the business paying rent to the landlord. It sets out the rights and obligations of the landlord and the business in relation to the property. The law relating to business leases differs from the law relating to residential leases. You will need a business lease if you have a business and wish to carry on your business from the commercial property. A properly written commercial lease is vital to carry on your business.




Home office rental agreement


What is it? A home office rental agreement is an agreement between an owner or lessee of property to share their home office space with another person. These agreements are usually used by start-ups and home-based businesses and will be in the form of a licence agreement. The licensor will be the owner or tenant of the property and the licensee will be the sharer who may be an individual or a company. If more than one individual sharer it is essential that they be all named on the agreement so that they remain jointly and severally liable under the rental agreement. The licence fee should be inclusive of the service costs eg internet, utilities, etc. Why is it important? If your business is a lessee, you must check your lease and check with your landlord to ensure that the grant of a licence to the sharers will not be a breach of your obligations as a tenant.




Office sharing agreement


What is it? Office space can be expensive in city centres and town centres. An office sharing agreement is an agreement between an owner of office space and another business which wants to share its office space. It is used where the owner of the property or lessee wants to share their office space with a business or individual or where two businesses or sole traders want to share the same office space. This agreement will be in the form of a licence agreement. If the office space is one room the licence will not grant each business or individual a defined and fixed space within the room but will grant the businesses and individuals the office space. The licence fee should be inclusive of the service costs eg internet, utilities, etc. Why is it important? If your business does not own the property you must check your lease and check with your landlord to ensure that your grant of a licence to the sharers will not be a breach of your obligations under your business tenancy.




Rent deposit deed


What is it? A rent deposit is a sum of money paid by a commercial tenant as security to their landlord prior to or at the grant of a commercial lease in respect of a commercial property rental. A rent deposit deed is the document which sets out how the landlord will safeguard a commercial tenant’s deposit. It works in a similar manner to rent deposits for residential lettings however in this case the deposit is usually held by the commercial landlord and not by a government- backed tenancy deposit scheme as in the case of residential rent deposits. Why is it important? A rent deposit deed protects the landlord and the tenant. Under the rent deposit deed, the deposit remains the property of the tenant however if the tenant does not pay the rent or breaches any fundamental term of the lease the landlord can take money out of the deposit in recompense. Rent deposit deeds are standard in commercial leases and provide peace of mind to a commercial landlord especially if the prospective tenant eg a start-up business or a sole trader cannot prove his/her trading credentials and creditworthiness. It gives a guarantee of easy access to funds should the tenant default. It is also beneficial for the tenant as it is akin to “savings” which will be returned to the tenant in future with any accrued interest if there is no breach of covenant and it is also a fund which the landlord may use to set off any breach of covenant by the tenant without the tenant having to incur further expense.




Lease Agreement


What is it? A lease is an agreement between a landlord and a business for the rental of a property for a set period in return for the tenant paying rent to the landlord. It sets out the rights and obligations of the landlord and the tenant in relation to the property. A lease can be for business or residential use. Why is it important? A commercial or business lease is an agreement between a landlord and a business for the rental of a property for business purposes. A residential lease is an agreement between a landlord and an individual for the rental of a property for residential use. The law relating to business leases differs from the law relating to residential leases. You will need a business lease if you have a business and wish to carry on your business from the commercial property. You will need a residential lease if you wish to rent property from a landlord for residential purposes.




Building works/Construction Agreement


What is it? Before you get building work done, check if you need permission or approval. Get quotes, check there is insurance in place and get a written contract. A building works/construction contract is a written agreement between the parties involved in the building or alteration of any structure. It sets out the rights and obligations of the parties and other parties involved eg sub-contractors, the administration procedures and the contract administrator if there is one. Why is it important? If you are a builder or a contractor doing work for a client or you are the client, you must ensure that the work arrangement is clear and that your contract sets out your work rights and obligations as well as the obligations of your client or the builder/contractor. A contract can be created for a specific project or you may wish to use a standard contract with amendments to fit the project. An example of a standard works contract is the JCT minor works building contract, which is designed for small, basic construction projects where the work is of a simple nature. Risks When checking the contract ensure that the contract describes the purpose of the contract; the work that will be done; the financial information eg the contract prices, deposit, schedule of progress payments, snagging, final payment and interest; payment due date and fees; project description; the handling of variations to the work order; dispute resolution; insurances and a signature line. Always ensure that your client signs the contract before you begin the work. Our construction solicitors can provide you with guidance on the different types of construction contracts and on which type of agreement is best for you. We can also help you negotiate a contract to protect your rights, assist you in reviewing contracts before you sign and provide you with representation in case of a breach of contract. Give us a call today at 01234 938089 or contact us online to learn more about the legal assistance we can provide.




Co-working Agreement


We help you prepare co-working agreements if you are setting up a business hub.





Sale and Purchase of Commerial Property

Licence to assign


What is it? If you are a landlord of commercial property, and your lease to your tenant includes a provision that says that your tenant cannot assign the lease to another (the “assignee”) without your consent and your tenant wants to assign or transfer their lease obligations to another commercial tenant you need a licence to assign to give them your consent. Why is it important? If the lease absolutely prevents assignment, then you can refuse consent without stating a reason. However, if the lease prohibits assignment without the landlord’s consent the landlord must have a good reason for refusing consent. If the tenant considers that the landlord’s reason is unreasonable the tenant can challenge the refusal in court. A tenant’s request to assign the lease may be made orally, by letter or by email as there is no prescribed form for a tenant’s application for consent to assign. A landlord can charge a tenant a fee to register an assignment. Landlords generally insist that the tenant or lessee gives a guarantee (Authorised Guarantee Agreement “AGA”) in the lease to be responsible for any breaches of covenants by the assignee so that the landlord can claim against the original tenant if the assignee breaches any of its obligations under the lease.




Licence to sublet


What is it? A licence to sublet is an agreement between a landlord and a tenant that gives the tenant the right to sublet part or the whole of the property to another tenant (the “sub-tenant”). If the lease absolutely prevents sub-letting, then you can refuse consent without stating a reason. However, if the lease prohibits sub-letting without the landlord’s consent the landlord must have a good reason for refusing consent. If the tenant considers that the landlord’s reason is unreasonable the tenant can challenge the refusal in court. Why is it important? Where there is a sub-lease the sub-lessee’s landlord is the tenant or lessee so if the sub-lessee breaches its obligations under the sub-lease the lessee or tenant is the only person entitled to take action against the sub-lessee. Landlords generally insist that the sub-tenant joins in the licence to sublet so that the landlord can claim against the sub-tenant if there is any breach of its obligations under the sub-lease.




Sale Agreement


What is it? If you are selling a commercial property, we will prepare the sale contract and related documents, deal with all enquiries raised by the buyer’s solicitors, report to you and advise you and once the contract has been agreed, complete the transaction as quickly and effectively as possible.




Purchase Agreement


What is it? If you are buying a commercial property we will review, amend and advise you on the contract, raise all relevant enquiries, conduct searches, report to you, advise you and then once the parties have agreed the contract complete and register the conveyance as quickly and effectively as possible





Buying & Selling a business

Share Purchase Agreement


What is it?

A Share purchase agreement (SPA) is an agreement setting out the terms and conditions relating to the sale and purchase of shares in a company. Share purchase agreements are often complex documents which can become lengthy and create significant delay, friction and cost if not dealt with by experienced, business minded lawyers.

Why is it important?

There is often a choice and negotiation over whether it’s best for either or both parties to buy/sell assets rather than shares. This would depend on whether the current owner (seller) is a limited company. If not, there can be no share sale! Further, where a buyer wants to preserve as many customer relations as possible, they may elect to buy the shares as opposed to assets.

The seller’s solicitor usually draws up the draft share purchase agreement.

Risks

While the buyer’s solicitor will try to protect the buyer the interest of the seller’s solicitor is to minimise this protection, in particular by limiting the seller’s liability for misrepresentation. However, in practice, where there is fraudulent misrepresentation the seller will still be liable so the buyer may accept such clauses since they are not valid if the seller can prove fraudulent misrepresentation.

Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.




Asset Purchase Agreement


What is it?

An asset purchase agreement is an agreement setting out the terms and conditions relating to the sale and purchase of assets of a business. In an asset purchase, the company itself will be selling the assets, whilst in a share sale, the individual shareholders will be the sellers.

Occasionally a buyer will prefer to acquire certain assets of a business rather than acquire all of the shares in a company and therefore, both its assets and liabilities.

A buyer will normally prefer to buy the assets of a business, while the seller will prefer to sell the shares. The main benefit of an asset purchase is that a buyer may selectively pick the assets and liabilities they want to acquire and there is generally less risk of hidden liabilities than with a share purchase.

Risks

The main disadvantage of an asset sale, as opposed to a share purchase agreement is that each item must be transferred in accordance with its proper rules and made enforceable against third parties (eg through consents and approvals). This is especially the case for customer contracts, as a third party may view the transaction as an opportunity to renegotiate their contract thereby adding delay and additional costs to the transaction.

In addition, there may be other important contracts that are non-transferrable, or licences and consents unique to the seller which may not be transferrable.

In an asset sale it is vital to identify what exactly is being purchased. Assets transferred as part of an Asset purchase agreement may include:

  • Plant and machinery.
  • Premises;
  • Stock;
  • Contracts;
  • Know-how; and
  • Goodwill.

Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.




Disclosure Letter


What is it?

A Non-Disclosure letter or Non-Disclosure Agreement, also called a Confidentiality Agreement, is a legal contract between two or more parties by which the parties agree not to disclose information (which is intended to be kept secret) that they have shared with each other during a business relationship to third parties.

Why is it important?

This Agreement may either be one-way (unilateral) or two-way (mutual), depending on whether both parties will be providing the secret information. If one party will be providing the secret information to the other, it is called a Unilateral Non-Disclosure Agreement.

For example, where an inventor of an idea is sharing the idea with another person, the inventor is the disclosing party and the other party is the receiving party. If the two parties will share the secret information between themselves, it is called a Mutual Non-Disclosure Agreement.

This Agreement can be used to share intellectual property, share commercial trading information or formalize a business relationship, for example, between an employer and an employee





Operating as a Sole Trader

Consultancy agreement


What is it?

A consultancy agreement is a contract between a self-employed person (Consultant) and a customer requiring the consultant’s services.

It is similar to the standard contract used to hire a freelancer. This agreement clarifies the basic terms of your relationship with the freelancer eg the work to be done, fees payable and other terms of the agreement eg a non-solicitation clause, confidentiality clause, data protection, ownership of any intellectual property created by the freelancer, indemnification clause for any losses you incur due to the freelancer’s breaches of third party intellectual property. Etc.

Why is it important?

More specialist freelancers may want you to sign up to their own bespoke terms and conditions when you instruct them. If that is the case you must ensure that you check all the clauses carefully to ensure that they do not conflict with your requirements and that you are happy with the terms eg consultant to be liable for breaches of your Intellectual property and third party intellectual property, confidentiality, fee payable, data protection, indemnification clause etc.

Risks

You should also ensure that you are aware of the IR35 tax rules. If a freelancer is providing services to you through a company your arrangement may be subject to the IR35 tax rules. This means that the freelancer may have to pay tax and national insurance as if they were employed by you. HMRC has a useful tool at www.gov.uk to enable businesses check employment status for tax purposes.

From April 2020 if you are a medium or large business the responsibility for determining whether the IR35 tax rules applies to the consultancy and for payment of the income tax and national insurance on behalf of the freelancer lies with the company to whom the freelancer provides the services. If you are a “small business” (i.e. a business which satisfies two or more of the following requirements – i) a turnover of £10.2 million or less, ii) no more than 50 staff and iii) a balance sheet f no more than £5.1million the responsibility for determining whether the IR35 tax rules apply and for payment of the tax and national insurance lies with the freelancer.




Home/Office rental agreement


What is it?

A home office rental agreement is an agreement between an owner or lessee of property to share their home office space with another person. These agreements are usually used by start-ups and home-based businesses and will be in the form of a licence agreement. The licensor will be the owner or tenant of the property and the licensee will be the sharer who may be an individual or a company. If more than one individual sharer it is essential that they be all named on the agreement so that they remain jointly and severally liable under the rental agreement. The licence fee should be inclusive of the service costs eg internet, utilities, etc.

Risks

If your business is a lessee, you must check your lease and check with your landlord to ensure that the grant of a licence to the sharers will not be a breach of your obligations as a tenant.




Purchase order


What is it?

A purchase order is prepared by a buyer when the buyer orders goods or A purchase order is prepared by a buyer when the buyer orders goods or services from a seller. The purchase order will indicate the type of goods, quantity of goods and the price the buyer is willing to pay for the products and or services.

Once the seller accepts the purchase order it becomes a legally binding contract as the seller has agreed to sell the goods and or services at the prices put forward by the buyer. The seller will then issue an invoice to the buyer based on the purchase order.

Why is it important?

Purchase orders are important for businesses as it is instrumental in tracking expenditure, makes orders easier to track, helps avoid audit problems and provides contractual legal protection for the buyer and the supplier.

Risks

Alongside a purchase order system, it is vital that a company has strong credit management practices to safeguard cash flow from bad debts and late payment.A strong debt collections process is vital to ensure payment is made when the goods or services have been delivered.

Invoice promptly and accurately and chase up with reminders. If a customer will not pay or ignores payment requests take action – Appoint a debt collection agency, take debt recovery action through the courts or pass the debt to a solicitor.

Pure Business Law has experienced debt collection lawyers who can assist you with debt recovery.





Ending or Assigning an Existing Agreement

Joint Venture Agreement


What is it? This agreement is needed when two or more parties decide to engage in a business collaboration to deal with a particular project. There are two main types of joint ventures: i) A contractual joint venture is a contract between two parties who are looking to work together on a commercial project and pool their resources but do not want to create a separate legal entity such as a joint venture company or an LLP.(eg two businesses collaborating to bid for a contract or carry out research and development) . The collaboration will be generally be short term or for a defined period and will be of restricted scope with a well-defined purpose. ii)A corporate joint venture is a contract between two parties looking to work together on a commercial project where they will both set up a separate company (“a joint venture company”) separate from their current operations, own shares in it, have representatives from each of the companies sitting on its board and or want their company to have limited liability for the debts and obligations of the joint venture. This type of joint venture is usually suitable if you will be collaboration on a longer term project and or your collaboration will be more risky and complex and therefore justifies the time and effort of setting up a separate company.




Manufacturing Agreement


What is it? This agreement is needed if you want to employ the services of another company an individual to manufacture goods/products for you for your business. The agreement should cover a number of key areas including manufacture of the goods, materials, specification, quality control, packaging, storage, confidentiality, data protection, insurance, pricing, payment, delivery, title and risk, intellectual property, disputes, force majeure, service of notices, liability and indemnity clauses.




Memorandum of Understanding


What is it? An MOU is a pre-contract, non-binding document setting out the key terms agreed by parties who intend to enter into a binding contract. It is also known as Heads of Terms, a Letter of Intent or a Term Sheet. It is a useful tool when two or more parties intend to enter into a future contract and want to identify, describe and agree, without it being contractually binding, the terms to be further negotiated and then recorded in a contractually binding contract. There will occasionally be statements in a MOU which are exceptions to the general approach that a MOU is not binding : this will occur if the parties put in statements which the MOU expressly states are to be of legally binding effect until a definitive contract is signed. If that is the case those statements will generally be binding. Why is it important? An MOU is useful to set out the progress made during negotiations, reduce the potential for misunderstandings, indicate the major issues which still need to be resolved and make it clear what the parties intend when they enter into the contract. Risks The disadvantage of a MOU is that it can take up a considerable amount of time and may distract the parties from working on negotiating a full and detailed binding contract. There have been occasions when the parties to a proposed commercial arrangement never actually agree or sign a definite contract and have gone on to implement their deal based only on the MOU. This creates a very uncertain legal position which may lead to disputes and legal problems.




Agency Agreement


What is it? The term “agent” is often used as shorthand in a business or legal context to mean a person authorised to act for or on behalf of another who is sometimes called the “principal” As a business you need to be able to distinguish whether or not a particular arrangement amounts to a commercial agency rather than another kind of agency or relationship. This is vital if you are to understand the various legal obligations, duties and liabilities that you owe your contractors/ agents and vice versa. There are different types of individuals and companies which describe themselves as “agents”. These include for instance – commercial agents, sales agents. Employment agents, escrow agents etc. Why is it important? A commercial agent is a kind of sales agent whose relationship with their principal is largely governed by the Commercial Agents (Council Directive) Regulations 1993 whereas the relationship between any other type of sales and their principal is largely governed by the common law and not by the Regulations. A “commercial agent” is defined by the Regulations as a “…self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of their principal or to negotiate and conclude such transactions on behalf of and in the name of that principal”. Risks All commercial agency arrangements must comply with the Commercial Agents Regulations 1993. In accordance with the European Withdrawal Act 2018( ad subject to the terms of any final Brexit deal) the Regulations will remain in force post-Brexit.In contrast a sales agent is a freelance self-employed individual or contractor who may or may not work for numerous clients. You need an Agency Agreement if you want to appoint a third party to act on your behalf, marketing and selling your products and services – generally in exchange for commission on any sales. An agency agreement sets out the terms and conditions of the relationship, the commission or fees the notice period and any exclusivity rights. Other ways in which a business can expand without considerable outlay are via a distributorship and a franchise. In contrast to a distributorship, an agent earns commission on sales but does not pay for the goods, own the goods or set the sale price charged to the customer.




Referral Agreement


What is it? A referral agreement is used where, in order to obtain more customers and sales and widen Business A’s customer base or sell into a new market, a supplier of goods or services (Business A) wishes to engage another person or business (Individual B or Business B) to effect an introduction/referral of new customers to Business A in return for which the agent receives a fee for the introduction/referral itself or for the introduction/referral where it results in a sale within a stated period after the introduction/referral. It is also known as an Introduction agreement. Examples of referrers/introducers are agents who introduce a seller of a business to a potential buyer or who introduce a potential investor to a business. Why is it important? If a business colleague is referring work to you or you are the referrer you should get a referral agreement that sets out the terms of your agreement. This will help avoid problems. A referral agreement can also be used where an e-commerce website wishes to increase its sales by allowing other websites to refer customers to them in return for a commission on sales obtained through such referrals. The fees can be either a fixed fee or percentage basis with payment when the referral is made or upon the first transaction or both. The fees and payment clause can be drafted so that if the refer fails to introduce any new business they will not get a fee.There are specific referral agreements for the introduction of clients for financial services eg investment advice and insurance products.




Licensing Agreement


What is it? There are numerous types of licensing agreements eg IP licensing agreement eg a trademark licence agreement, a licence to occupy property, a software licence agreement etc.A software licence agreement is an agreement between a software licensor (generally a software developer and/or owner) and licensee who will be using the licensed software in the course of a business or personally. Why is it important? We always recommend that our clients get a licensing agreement if for example they want to give a person or another business the right to use their technology, software or any other type of intellectual property. A software licence will set out what the user may or may not do with a piece of software thereby helping developers ensure that they maximise returns on their investments, restrict others from free use of their creative and inventive work and product software that remains stable across a broad range of computer systems.




End User Licence Agreement


What is it? This is a licence agreement between a software provider and a user where software is distributed en-masse through retailers or electronically eg Microsoft and people who use its software. The different types of end-user licences include a Web Wrap software licence (designed for use with software that is distributed electronically via download ) Click Wrap Licence (designed for use with software that can be distributed electronically via download or on physical media such as a CD or DVD-Rom, Shrink Wrap Licence (designed for use in or on the packaging of software that is distributed on physical media such as a CD or DVD-Rom).




Service Level Agreement


What is it? Businesses often seek to obtain services from other businesses for various reasons. In some cases, a simple service agreement is all that is needed especially where the services in question are to be provided over a short term.However, in some cases a long-term relationship and the need for service consistency is essential. In such cases a business owner may prefer to enter into a Service Level Agreement with the service provider. Why is it important? Commonly used in the IT & Technology industries, but also applicable in other areas of business especially where large-scale or complex services are involved Service Level Agreements set out the services to be provided under a contract and also sets out the levels of performance to which those services must be provided. Detailed provisions govern the monitoring of the performance of the services and the agreement. Risks The service provider is thereby incentivised to consistently provide services in line with the agreed performance levels. If it fails to meet the agreed service levels it is subject to penalties. Service level agreements are preferable to standard service agreements as they contain much more detail, enhanced clarity and accountability over and above standard service agreements.




Partnership agreement


What is it? There are 2 main types of partnership agreements: An unlimited partnership – This is a relationship between two or more parties carrying on business together to make a profit. It is usually referred to as a “partnership” or a “general partnership” to distinguish it from other types of partnership such as a limited liability partnership. A partnership can arise by law even if there is no agreement in writing and even if the parties did not intend to create a partnership. An unlimited partnership is not a separate legal entity unlike a company or a limited liability partnership. Therefore, its partners have unlimited liability for the partnership’s debts. A limited liability partnership – Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement setting out how the LLP will be run.




LLP agreement


What is it? This agreement applies when you have a limited liability partnership. Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. Why is it important? The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement (LLP Agreement) setting out how the LLP will be run.




Distribution agreement


What is it? A distributor buys goods from a supplier to sell on to customers. They can earn a profit margin based on the “mark-up” they add to the original sale price. A Distributorship agreement is an agreement whereby the manufacturer appoints the distributor on a “sole” or “non-exclusive” basis) to resell the manufacturer’s products in a particular territory/ies. In this case, the ownership of the goods is transferred to the distributor prior to the marketing and sale of the goods which means that the distributor may hold stocks of goods which they pay for and own – they therefore bear the risk as to whether they can resell the goods. There are different types of distribution agreements eg exclusive, sole and selective distribution agreements. Business relationships can sour if based on verbal agreements. Protect your rights by ensuring you have a written distribution agreement.




Model release letter


What is it? A signed Model Release Form protects your profit margin and your copyright. Whether you work in a marketing business graphic design or are a commercial vlogger or blogger you need to ensure that any photographs that you use in your business has a properly signed release form. Whilst you do not generally need written permission to take photos, if you take photos and wish to publish the photos on the internet or in any other way or if you are starting a photography business you can protect yourself from any liability or legal proceedings by using a Model Release Form or Letter. A Model Release Form is the contract between the photographer or User and the “model” (i.e. the subject or owner of the image or photograph). Designed to protect both parties it specifies the ways in which the images or models can or cannot be used (eg for advertising, to make prints, post on social media etc), the media formats, the use or not of the model’s name, the model’s rights (or not) to inspect the end product before publication and the expiry (or not) of the release. Why is it important? A Model Release Form is not about obtaining permission to take photographs – it is about obtaining signed consent to publish the photographs for commercial purposes. Whilst it is generally okay to take pictures of a person or people in a public place without written permission if you want to use that photo for specific commercial purposes eg to promote a product on the internet or elsewhere it is best to be safe and get a signed release form from the “model” or owner of the “model”. Risks But do get legal advice before you use a release form template as it may need adapting to fit your particular needs.And remember! If you want to use images for a purpose not originally agreed, you MUST get further signed consent.




Sales agency agreement


What is it? If you are a business selling products you may decide to employ the services of a sales agent. A sales agent is a freelance self-employed business or contractor who might or might not work for several clients. The term “sales agent” includes a “commercial agent” but it is usual to distinguish the two forms of agency by referring to someone as a sales agent only if they are not a “commercial agent” as the legal position of a “commercial agent” differs substantially from other forms of “sales agency”. The business that owns the products will be called the “Principal” and the sales agent will be called the “Agent”. The sales agent is paid commission only and so is motivated to make as many sales as possible to maximise their income.Central to the relationship between a business and their sales agent will be the “Agency Agreement”. The Sales Agency agreement will set out the product the agent will be selling, where the agent will be selling those products, how the sales are to take place, commission payable on all sales and the key rights and responsibilities of the parties. Why is it important? The use of sales agents as opposed to an employed sales team has a number of benefits for the business (i.e. the “Principal”) since commission is only payable on achieved sales, there are no fixed employment costs, and the agent will often already have a network of contacts ie established customer base, will know the market in their area and will have credibility with their customer base.




Sub-contracting agreement


What is it? Many business contracts allow one or both parties to sub-contract all or part of their obligations under a contract. This can be done via a letter termed a “Notice of Intention to Sub-contract” from the main contractor to the other party to the main contract or via a formal “Sub-contracting” agreement. Where a “Notice of intention to sub-contract” letter is used, the main contractor (ie sender of the letter) would inform the other party to the contract (ie the recipient of the letter) that the main contractor intends to subcontract certain of their obligations under a contract and will provide details of the subcontractor(s) to whom the obligations will be sub-contracted, a detailed description of the obligations to be sub-contracted with cross-references to the relevant parts of the Contract agreement between the main contractor and the other party to the contract agreement. The recipient will also be reminded that they are not a party to the sub-contract and that the main contractor will remain their primary contact person and will also remain liable for any acts of omissions of the subcontractors. As an option, the main contractor may also decide to enter into a formal “Sub-contracting” agreement with the sub-contractor and send a copy of this to




Franchise Agreement


What is it? Franchising your business lets you licence your business model to companies or individual in particular geographical areas and allows you to increase your profits while maintaining a significant degree of control over your brand. A Franchise agreement is an agreement under which the owner of a business grants a licence or licences to others (the “franchisees”) to operate that business in a particular area within the UK or internationally either on a “sole” or “non-exclusive” basis, for a fee therefore spreading their corporate identity and products or services without the expense of setting up new establishments. All franchisees will use a common identity including the name, trademarks, goodwill, other intellectual property and or products of the franchisor. The franchisor will also provide a “Quality Manual” which in effect is a rule book setting out all the relevant detail needed for the successful day-to-day running of the franchised business eg minimum standards and insurance requirements. The agreement will usually include a confidentiality clause protecting all commercially sensitive information and trade secrets from unauthorised disclosure thereby protecting the interests of the franchisor. Why is it important? Franchising has benefits for the franchisor and the franchisee. The franchisor can grow its business without having to open, staff and manage new premises or branches itself whilst the franchisee can manage his/her own business which has been already tested by the franchisor and has access to the franchisor’s experience and expertise. McDonalds and Kentucky Fried Chicken (KFC) operate their own restaurants and food outlets but also grant franchises to others to operate McDonalds and KFC businesses using their logos with McDonalds and Kentucky Fried Chicken exercising tight quality control over the restaurants, their location, food, health and safety etc.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


Health & Safety

Licence to assign


What is it? If you are a landlord of commercial property, and your lease to your tenant includes a provision that says that your tenant cannot assign the lease to another (the “assignee”) without your consent and your tenant wants to assign or transfer their lease obligations to another commercial tenant you need a licence to assign to give them your consent. Why is it important? If the lease absolutely prevents assignment, then you can refuse consent without stating a reason. However, if the lease prohibits assignment without the landlord’s consent the landlord must have a good reason for refusing consent. If the tenant considers that the landlord’s reason is unreasonable the tenant can challenge the refusal in court. A tenant’s request to assign the lease may be made orally, by letter or by email as there is no prescribed form for a tenant’s application for consent to assign. A landlord can charge a tenant a fee to register an assignment. Landlords generally insist that the tenant or lessee gives a guarantee (Authorised Guarantee Agreement “AGA”) in the lease to be responsible for any breaches of covenants by the assignee so that the landlord can claim against the original tenant if the assignee breaches any of its obligations under the lease.




Licence to sublet


What is it? A licence to sublet is an agreement between a landlord and a tenant that gives the tenant the right to sublet part or the whole of the property to another tenant (the “sub-tenant”). If the lease absolutely prevents sub-letting, then you can refuse consent without stating a reason. However, if the lease prohibits sub-letting without the landlord’s consent the landlord must have a good reason for refusing consent. If the tenant considers that the landlord’s reason is unreasonable the tenant can challenge the refusal in court. Why is it important? Where there is a sub-lease the sub-lessee’s landlord is the tenant or lessee so if the sub-lessee breaches its obligations under the sub-lease the lessee or tenant is the only person entitled to take action against the sub-lessee. Landlords generally insist that the sub-tenant joins in the licence to sublet so that the landlord can claim against the sub-tenant if there is any breach of its obligations under the sub-lease.




Sale Agreement


What is it? If you are selling a commercial property, we will prepare the sale contract and related documents, deal with all enquiries raised by the buyer’s solicitors, report to you and advise you and once the contract has been agreed, complete the transaction as quickly and effectively as possible.




Purchase Agreement


What is it? If you are buying a commercial property we will review, amend and advise you on the contract, raise all relevant enquiries, conduct searches, report to you, advise you and then once the parties have agreed the contract complete and register the conveyance as quickly and effectively as possible





 
 
 
 

Planning & Highways

Joint Venture Agreement


What is it? This agreement is needed when two or more parties decide to engage in a business collaboration to deal with a particular project. There are two main types of joint ventures: i) A contractual joint venture is a contract between two parties who are looking to work together on a commercial project and pool their resources but do not want to create a separate legal entity such as a joint venture company or an LLP.(eg two businesses collaborating to bid for a contract or carry out research and development) . The collaboration will be generally be short term or for a defined period and will be of restricted scope with a well-defined purpose. ii)A corporate joint venture is a contract between two parties looking to work together on a commercial project where they will both set up a separate company (“a joint venture company”) separate from their current operations, own shares in it, have representatives from each of the companies sitting on its board and or want their company to have limited liability for the debts and obligations of the joint venture. This type of joint venture is usually suitable if you will be collaboration on a longer term project and or your collaboration will be more risky and complex and therefore justifies the time and effort of setting up a separate company.




Manufacturing Agreement


What is it? This agreement is needed if you want to employ the services of another company an individual to manufacture goods/products for you for your business. The agreement should cover a number of key areas including manufacture of the goods, materials, specification, quality control, packaging, storage, confidentiality, data protection, insurance, pricing, payment, delivery, title and risk, intellectual property, disputes, force majeure, service of notices, liability and indemnity clauses.




Memorandum of Understanding


What is it? An MOU is a pre-contract, non-binding document setting out the key terms agreed by parties who intend to enter into a binding contract. It is also known as Heads of Terms, a Letter of Intent or a Term Sheet. It is a useful tool when two or more parties intend to enter into a future contract and want to identify, describe and agree, without it being contractually binding, the terms to be further negotiated and then recorded in a contractually binding contract. There will occasionally be statements in a MOU which are exceptions to the general approach that a MOU is not binding : this will occur if the parties put in statements which the MOU expressly states are to be of legally binding effect until a definitive contract is signed. If that is the case those statements will generally be binding. Why is it important? An MOU is useful to set out the progress made during negotiations, reduce the potential for misunderstandings, indicate the major issues which still need to be resolved and make it clear what the parties intend when they enter into the contract. Risks The disadvantage of a MOU is that it can take up a considerable amount of time and may distract the parties from working on negotiating a full and detailed binding contract. There have been occasions when the parties to a proposed commercial arrangement never actually agree or sign a definite contract and have gone on to implement their deal based only on the MOU. This creates a very uncertain legal position which may lead to disputes and legal problems.




Agency Agreement


What is it? The term “agent” is often used as shorthand in a business or legal context to mean a person authorised to act for or on behalf of another who is sometimes called the “principal” As a business you need to be able to distinguish whether or not a particular arrangement amounts to a commercial agency rather than another kind of agency or relationship. This is vital if you are to understand the various legal obligations, duties and liabilities that you owe your contractors/ agents and vice versa. There are different types of individuals and companies which describe themselves as “agents”. These include for instance – commercial agents, sales agents. Employment agents, escrow agents etc. Why is it important? A commercial agent is a kind of sales agent whose relationship with their principal is largely governed by the Commercial Agents (Council Directive) Regulations 1993 whereas the relationship between any other type of sales and their principal is largely governed by the common law and not by the Regulations. A “commercial agent” is defined by the Regulations as a “…self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of their principal or to negotiate and conclude such transactions on behalf of and in the name of that principal”. Risks All commercial agency arrangements must comply with the Commercial Agents Regulations 1993. In accordance with the European Withdrawal Act 2018( ad subject to the terms of any final Brexit deal) the Regulations will remain in force post-Brexit.In contrast a sales agent is a freelance self-employed individual or contractor who may or may not work for numerous clients. You need an Agency Agreement if you want to appoint a third party to act on your behalf, marketing and selling your products and services – generally in exchange for commission on any sales. An agency agreement sets out the terms and conditions of the relationship, the commission or fees the notice period and any exclusivity rights. Other ways in which a business can expand without considerable outlay are via a distributorship and a franchise. In contrast to a distributorship, an agent earns commission on sales but does not pay for the goods, own the goods or set the sale price charged to the customer.




Referral Agreement


What is it? A referral agreement is used where, in order to obtain more customers and sales and widen Business A’s customer base or sell into a new market, a supplier of goods or services (Business A) wishes to engage another person or business (Individual B or Business B) to effect an introduction/referral of new customers to Business A in return for which the agent receives a fee for the introduction/referral itself or for the introduction/referral where it results in a sale within a stated period after the introduction/referral. It is also known as an Introduction agreement. Examples of referrers/introducers are agents who introduce a seller of a business to a potential buyer or who introduce a potential investor to a business. Why is it important? If a business colleague is referring work to you or you are the referrer you should get a referral agreement that sets out the terms of your agreement. This will help avoid problems. A referral agreement can also be used where an e-commerce website wishes to increase its sales by allowing other websites to refer customers to them in return for a commission on sales obtained through such referrals. The fees can be either a fixed fee or percentage basis with payment when the referral is made or upon the first transaction or both. The fees and payment clause can be drafted so that if the refer fails to introduce any new business they will not get a fee.There are specific referral agreements for the introduction of clients for financial services eg investment advice and insurance products.




Licensing Agreement


What is it? There are numerous types of licensing agreements eg IP licensing agreement eg a trademark licence agreement, a licence to occupy property, a software licence agreement etc.A software licence agreement is an agreement between a software licensor (generally a software developer and/or owner) and licensee who will be using the licensed software in the course of a business or personally. Why is it important? We always recommend that our clients get a licensing agreement if for example they want to give a person or another business the right to use their technology, software or any other type of intellectual property. A software licence will set out what the user may or may not do with a piece of software thereby helping developers ensure that they maximise returns on their investments, restrict others from free use of their creative and inventive work and product software that remains stable across a broad range of computer systems.




End User Licence Agreement


What is it? This is a licence agreement between a software provider and a user where software is distributed en-masse through retailers or electronically eg Microsoft and people who use its software. The different types of end-user licences include a Web Wrap software licence (designed for use with software that is distributed electronically via download ) Click Wrap Licence (designed for use with software that can be distributed electronically via download or on physical media such as a CD or DVD-Rom, Shrink Wrap Licence (designed for use in or on the packaging of software that is distributed on physical media such as a CD or DVD-Rom).




Service Level Agreement


What is it? Businesses often seek to obtain services from other businesses for various reasons. In some cases, a simple service agreement is all that is needed especially where the services in question are to be provided over a short term.However, in some cases a long-term relationship and the need for service consistency is essential. In such cases a business owner may prefer to enter into a Service Level Agreement with the service provider. Why is it important? Commonly used in the IT & Technology industries, but also applicable in other areas of business especially where large-scale or complex services are involved Service Level Agreements set out the services to be provided under a contract and also sets out the levels of performance to which those services must be provided. Detailed provisions govern the monitoring of the performance of the services and the agreement. Risks The service provider is thereby incentivised to consistently provide services in line with the agreed performance levels. If it fails to meet the agreed service levels it is subject to penalties. Service level agreements are preferable to standard service agreements as they contain much more detail, enhanced clarity and accountability over and above standard service agreements.




Partnership agreement


What is it? There are 2 main types of partnership agreements: An unlimited partnership – This is a relationship between two or more parties carrying on business together to make a profit. It is usually referred to as a “partnership” or a “general partnership” to distinguish it from other types of partnership such as a limited liability partnership. A partnership can arise by law even if there is no agreement in writing and even if the parties did not intend to create a partnership. An unlimited partnership is not a separate legal entity unlike a company or a limited liability partnership. Therefore, its partners have unlimited liability for the partnership’s debts. A limited liability partnership – Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement setting out how the LLP will be run.




LLP agreement


What is it? This agreement applies when you have a limited liability partnership. Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. Why is it important? The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement (LLP Agreement) setting out how the LLP will be run.




Distribution agreement


What is it? A distributor buys goods from a supplier to sell on to customers. They can earn a profit margin based on the “mark-up” they add to the original sale price. A Distributorship agreement is an agreement whereby the manufacturer appoints the distributor on a “sole” or “non-exclusive” basis) to resell the manufacturer’s products in a particular territory/ies. In this case, the ownership of the goods is transferred to the distributor prior to the marketing and sale of the goods which means that the distributor may hold stocks of goods which they pay for and own – they therefore bear the risk as to whether they can resell the goods. There are different types of distribution agreements eg exclusive, sole and selective distribution agreements. Business relationships can sour if based on verbal agreements. Protect your rights by ensuring you have a written distribution agreement.




Model release letter


What is it? A signed Model Release Form protects your profit margin and your copyright. Whether you work in a marketing business graphic design or are a commercial vlogger or blogger you need to ensure that any photographs that you use in your business has a properly signed release form. Whilst you do not generally need written permission to take photos, if you take photos and wish to publish the photos on the internet or in any other way or if you are starting a photography business you can protect yourself from any liability or legal proceedings by using a Model Release Form or Letter. A Model Release Form is the contract between the photographer or User and the “model” (i.e. the subject or owner of the image or photograph). Designed to protect both parties it specifies the ways in which the images or models can or cannot be used (eg for advertising, to make prints, post on social media etc), the media formats, the use or not of the model’s name, the model’s rights (or not) to inspect the end product before publication and the expiry (or not) of the release. Why is it important? A Model Release Form is not about obtaining permission to take photographs – it is about obtaining signed consent to publish the photographs for commercial purposes. Whilst it is generally okay to take pictures of a person or people in a public place without written permission if you want to use that photo for specific commercial purposes eg to promote a product on the internet or elsewhere it is best to be safe and get a signed release form from the “model” or owner of the “model”. Risks But do get legal advice before you use a release form template as it may need adapting to fit your particular needs.And remember! If you want to use images for a purpose not originally agreed, you MUST get further signed consent.




Sales agency agreement


What is it? If you are a business selling products you may decide to employ the services of a sales agent. A sales agent is a freelance self-employed business or contractor who might or might not work for several clients. The term “sales agent” includes a “commercial agent” but it is usual to distinguish the two forms of agency by referring to someone as a sales agent only if they are not a “commercial agent” as the legal position of a “commercial agent” differs substantially from other forms of “sales agency”. The business that owns the products will be called the “Principal” and the sales agent will be called the “Agent”. The sales agent is paid commission only and so is motivated to make as many sales as possible to maximise their income.Central to the relationship between a business and their sales agent will be the “Agency Agreement”. The Sales Agency agreement will set out the product the agent will be selling, where the agent will be selling those products, how the sales are to take place, commission payable on all sales and the key rights and responsibilities of the parties. Why is it important? The use of sales agents as opposed to an employed sales team has a number of benefits for the business (i.e. the “Principal”) since commission is only payable on achieved sales, there are no fixed employment costs, and the agent will often already have a network of contacts ie established customer base, will know the market in their area and will have credibility with their customer base.




Sub-contracting agreement


What is it? Many business contracts allow one or both parties to sub-contract all or part of their obligations under a contract. This can be done via a letter termed a “Notice of Intention to Sub-contract” from the main contractor to the other party to the main contract or via a formal “Sub-contracting” agreement. Where a “Notice of intention to sub-contract” letter is used, the main contractor (ie sender of the letter) would inform the other party to the contract (ie the recipient of the letter) that the main contractor intends to subcontract certain of their obligations under a contract and will provide details of the subcontractor(s) to whom the obligations will be sub-contracted, a detailed description of the obligations to be sub-contracted with cross-references to the relevant parts of the Contract agreement between the main contractor and the other party to the contract agreement. The recipient will also be reminded that they are not a party to the sub-contract and that the main contractor will remain their primary contact person and will also remain liable for any acts of omissions of the subcontractors. As an option, the main contractor may also decide to enter into a formal “Sub-contracting” agreement with the sub-contractor and send a copy of this to




Franchise Agreement


What is it? Franchising your business lets you licence your business model to companies or individual in particular geographical areas and allows you to increase your profits while maintaining a significant degree of control over your brand. A Franchise agreement is an agreement under which the owner of a business grants a licence or licences to others (the “franchisees”) to operate that business in a particular area within the UK or internationally either on a “sole” or “non-exclusive” basis, for a fee therefore spreading their corporate identity and products or services without the expense of setting up new establishments. All franchisees will use a common identity including the name, trademarks, goodwill, other intellectual property and or products of the franchisor. The franchisor will also provide a “Quality Manual” which in effect is a rule book setting out all the relevant detail needed for the successful day-to-day running of the franchised business eg minimum standards and insurance requirements. The agreement will usually include a confidentiality clause protecting all commercially sensitive information and trade secrets from unauthorised disclosure thereby protecting the interests of the franchisor. Why is it important? Franchising has benefits for the franchisor and the franchisee. The franchisor can grow its business without having to open, staff and manage new premises or branches itself whilst the franchisee can manage his/her own business which has been already tested by the franchisor and has access to the franchisor’s experience and expertise. McDonalds and Kentucky Fried Chicken (KFC) operate their own restaurants and food outlets but also grant franchises to others to operate McDonalds and KFC businesses using their logos with McDonalds and Kentucky Fried Chicken exercising tight quality control over the restaurants, their location, food, health and safety etc.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


 

Managing employee performance

Joint Venture Agreement


What is it? This agreement is needed when two or more parties decide to engage in a business collaboration to deal with a particular project. There are two main types of joint ventures: i) A contractual joint venture is a contract between two parties who are looking to work together on a commercial project and pool their resources but do not want to create a separate legal entity such as a joint venture company or an LLP.(eg two businesses collaborating to bid for a contract or carry out research and development) . The collaboration will be generally be short term or for a defined period and will be of restricted scope with a well-defined purpose. ii)A corporate joint venture is a contract between two parties looking to work together on a commercial project where they will both set up a separate company (“a joint venture company”) separate from their current operations, own shares in it, have representatives from each of the companies sitting on its board and or want their company to have limited liability for the debts and obligations of the joint venture. This type of joint venture is usually suitable if you will be collaboration on a longer term project and or your collaboration will be more risky and complex and therefore justifies the time and effort of setting up a separate company.




Manufacturing Agreement


What is it? This agreement is needed if you want to employ the services of another company an individual to manufacture goods/products for you for your business. The agreement should cover a number of key areas including manufacture of the goods, materials, specification, quality control, packaging, storage, confidentiality, data protection, insurance, pricing, payment, delivery, title and risk, intellectual property, disputes, force majeure, service of notices, liability and indemnity clauses.




Memorandum of Understanding


What is it? An MOU is a pre-contract, non-binding document setting out the key terms agreed by parties who intend to enter into a binding contract. It is also known as Heads of Terms, a Letter of Intent or a Term Sheet. It is a useful tool when two or more parties intend to enter into a future contract and want to identify, describe and agree, without it being contractually binding, the terms to be further negotiated and then recorded in a contractually binding contract. There will occasionally be statements in a MOU which are exceptions to the general approach that a MOU is not binding : this will occur if the parties put in statements which the MOU expressly states are to be of legally binding effect until a definitive contract is signed. If that is the case those statements will generally be binding. Why is it important? An MOU is useful to set out the progress made during negotiations, reduce the potential for misunderstandings, indicate the major issues which still need to be resolved and make it clear what the parties intend when they enter into the contract. Risks The disadvantage of a MOU is that it can take up a considerable amount of time and may distract the parties from working on negotiating a full and detailed binding contract. There have been occasions when the parties to a proposed commercial arrangement never actually agree or sign a definite contract and have gone on to implement their deal based only on the MOU. This creates a very uncertain legal position which may lead to disputes and legal problems.




Agency Agreement


What is it? The term “agent” is often used as shorthand in a business or legal context to mean a person authorised to act for or on behalf of another who is sometimes called the “principal” As a business you need to be able to distinguish whether or not a particular arrangement amounts to a commercial agency rather than another kind of agency or relationship. This is vital if you are to understand the various legal obligations, duties and liabilities that you owe your contractors/ agents and vice versa. There are different types of individuals and companies which describe themselves as “agents”. These include for instance – commercial agents, sales agents. Employment agents, escrow agents etc. Why is it important? A commercial agent is a kind of sales agent whose relationship with their principal is largely governed by the Commercial Agents (Council Directive) Regulations 1993 whereas the relationship between any other type of sales and their principal is largely governed by the common law and not by the Regulations. A “commercial agent” is defined by the Regulations as a “…self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of their principal or to negotiate and conclude such transactions on behalf of and in the name of that principal”. Risks All commercial agency arrangements must comply with the Commercial Agents Regulations 1993. In accordance with the European Withdrawal Act 2018( ad subject to the terms of any final Brexit deal) the Regulations will remain in force post-Brexit.In contrast a sales agent is a freelance self-employed individual or contractor who may or may not work for numerous clients. You need an Agency Agreement if you want to appoint a third party to act on your behalf, marketing and selling your products and services – generally in exchange for commission on any sales. An agency agreement sets out the terms and conditions of the relationship, the commission or fees the notice period and any exclusivity rights. Other ways in which a business can expand without considerable outlay are via a distributorship and a franchise. In contrast to a distributorship, an agent earns commission on sales but does not pay for the goods, own the goods or set the sale price charged to the customer.




Referral Agreement


What is it? A referral agreement is used where, in order to obtain more customers and sales and widen Business A’s customer base or sell into a new market, a supplier of goods or services (Business A) wishes to engage another person or business (Individual B or Business B) to effect an introduction/referral of new customers to Business A in return for which the agent receives a fee for the introduction/referral itself or for the introduction/referral where it results in a sale within a stated period after the introduction/referral. It is also known as an Introduction agreement. Examples of referrers/introducers are agents who introduce a seller of a business to a potential buyer or who introduce a potential investor to a business. Why is it important? If a business colleague is referring work to you or you are the referrer you should get a referral agreement that sets out the terms of your agreement. This will help avoid problems. A referral agreement can also be used where an e-commerce website wishes to increase its sales by allowing other websites to refer customers to them in return for a commission on sales obtained through such referrals. The fees can be either a fixed fee or percentage basis with payment when the referral is made or upon the first transaction or both. The fees and payment clause can be drafted so that if the refer fails to introduce any new business they will not get a fee.There are specific referral agreements for the introduction of clients for financial services eg investment advice and insurance products.




Licensing Agreement


What is it? There are numerous types of licensing agreements eg IP licensing agreement eg a trademark licence agreement, a licence to occupy property, a software licence agreement etc.A software licence agreement is an agreement between a software licensor (generally a software developer and/or owner) and licensee who will be using the licensed software in the course of a business or personally. Why is it important? We always recommend that our clients get a licensing agreement if for example they want to give a person or another business the right to use their technology, software or any other type of intellectual property. A software licence will set out what the user may or may not do with a piece of software thereby helping developers ensure that they maximise returns on their investments, restrict others from free use of their creative and inventive work and product software that remains stable across a broad range of computer systems.




End User Licence Agreement


What is it? This is a licence agreement between a software provider and a user where software is distributed en-masse through retailers or electronically eg Microsoft and people who use its software. The different types of end-user licences include a Web Wrap software licence (designed for use with software that is distributed electronically via download ) Click Wrap Licence (designed for use with software that can be distributed electronically via download or on physical media such as a CD or DVD-Rom, Shrink Wrap Licence (designed for use in or on the packaging of software that is distributed on physical media such as a CD or DVD-Rom).




Service Level Agreement


What is it? Businesses often seek to obtain services from other businesses for various reasons. In some cases, a simple service agreement is all that is needed especially where the services in question are to be provided over a short term.However, in some cases a long-term relationship and the need for service consistency is essential. In such cases a business owner may prefer to enter into a Service Level Agreement with the service provider. Why is it important? Commonly used in the IT & Technology industries, but also applicable in other areas of business especially where large-scale or complex services are involved Service Level Agreements set out the services to be provided under a contract and also sets out the levels of performance to which those services must be provided. Detailed provisions govern the monitoring of the performance of the services and the agreement. Risks The service provider is thereby incentivised to consistently provide services in line with the agreed performance levels. If it fails to meet the agreed service levels it is subject to penalties. Service level agreements are preferable to standard service agreements as they contain much more detail, enhanced clarity and accountability over and above standard service agreements.




Partnership agreement


What is it? There are 2 main types of partnership agreements: An unlimited partnership – This is a relationship between two or more parties carrying on business together to make a profit. It is usually referred to as a “partnership” or a “general partnership” to distinguish it from other types of partnership such as a limited liability partnership. A partnership can arise by law even if there is no agreement in writing and even if the parties did not intend to create a partnership. An unlimited partnership is not a separate legal entity unlike a company or a limited liability partnership. Therefore, its partners have unlimited liability for the partnership’s debts. A limited liability partnership – Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement setting out how the LLP will be run.




LLP agreement


What is it? This agreement applies when you have a limited liability partnership. Unlike an unlimited partnership a limited liability partnership (LLP) requires the establishment of a separate corporate body through which the collaboration will be conducted. Why is it important? The partners will have limited liability in the same way as shareholders in a company. The partners will usually sign a member’s agreement (LLP Agreement) setting out how the LLP will be run.




Distribution agreement


What is it? A distributor buys goods from a supplier to sell on to customers. They can earn a profit margin based on the “mark-up” they add to the original sale price. A Distributorship agreement is an agreement whereby the manufacturer appoints the distributor on a “sole” or “non-exclusive” basis) to resell the manufacturer’s products in a particular territory/ies. In this case, the ownership of the goods is transferred to the distributor prior to the marketing and sale of the goods which means that the distributor may hold stocks of goods which they pay for and own – they therefore bear the risk as to whether they can resell the goods. There are different types of distribution agreements eg exclusive, sole and selective distribution agreements. Business relationships can sour if based on verbal agreements. Protect your rights by ensuring you have a written distribution agreement.




Model release letter


What is it? A signed Model Release Form protects your profit margin and your copyright. Whether you work in a marketing business graphic design or are a commercial vlogger or blogger you need to ensure that any photographs that you use in your business has a properly signed release form. Whilst you do not generally need written permission to take photos, if you take photos and wish to publish the photos on the internet or in any other way or if you are starting a photography business you can protect yourself from any liability or legal proceedings by using a Model Release Form or Letter. A Model Release Form is the contract between the photographer or User and the “model” (i.e. the subject or owner of the image or photograph). Designed to protect both parties it specifies the ways in which the images or models can or cannot be used (eg for advertising, to make prints, post on social media etc), the media formats, the use or not of the model’s name, the model’s rights (or not) to inspect the end product before publication and the expiry (or not) of the release. Why is it important? A Model Release Form is not about obtaining permission to take photographs – it is about obtaining signed consent to publish the photographs for commercial purposes. Whilst it is generally okay to take pictures of a person or people in a public place without written permission if you want to use that photo for specific commercial purposes eg to promote a product on the internet or elsewhere it is best to be safe and get a signed release form from the “model” or owner of the “model”. Risks But do get legal advice before you use a release form template as it may need adapting to fit your particular needs.And remember! If you want to use images for a purpose not originally agreed, you MUST get further signed consent.




Sales agency agreement


What is it? If you are a business selling products you may decide to employ the services of a sales agent. A sales agent is a freelance self-employed business or contractor who might or might not work for several clients. The term “sales agent” includes a “commercial agent” but it is usual to distinguish the two forms of agency by referring to someone as a sales agent only if they are not a “commercial agent” as the legal position of a “commercial agent” differs substantially from other forms of “sales agency”. The business that owns the products will be called the “Principal” and the sales agent will be called the “Agent”. The sales agent is paid commission only and so is motivated to make as many sales as possible to maximise their income.Central to the relationship between a business and their sales agent will be the “Agency Agreement”. The Sales Agency agreement will set out the product the agent will be selling, where the agent will be selling those products, how the sales are to take place, commission payable on all sales and the key rights and responsibilities of the parties. Why is it important? The use of sales agents as opposed to an employed sales team has a number of benefits for the business (i.e. the “Principal”) since commission is only payable on achieved sales, there are no fixed employment costs, and the agent will often already have a network of contacts ie established customer base, will know the market in their area and will have credibility with their customer base.




Sub-contracting agreement


What is it? Many business contracts allow one or both parties to sub-contract all or part of their obligations under a contract. This can be done via a letter termed a “Notice of Intention to Sub-contract” from the main contractor to the other party to the main contract or via a formal “Sub-contracting” agreement. Where a “Notice of intention to sub-contract” letter is used, the main contractor (ie sender of the letter) would inform the other party to the contract (ie the recipient of the letter) that the main contractor intends to subcontract certain of their obligations under a contract and will provide details of the subcontractor(s) to whom the obligations will be sub-contracted, a detailed description of the obligations to be sub-contracted with cross-references to the relevant parts of the Contract agreement between the main contractor and the other party to the contract agreement. The recipient will also be reminded that they are not a party to the sub-contract and that the main contractor will remain their primary contact person and will also remain liable for any acts of omissions of the subcontractors. As an option, the main contractor may also decide to enter into a formal “Sub-contracting” agreement with the sub-contractor and send a copy of this to




Franchise Agreement


What is it? Franchising your business lets you licence your business model to companies or individual in particular geographical areas and allows you to increase your profits while maintaining a significant degree of control over your brand. A Franchise agreement is an agreement under which the owner of a business grants a licence or licences to others (the “franchisees”) to operate that business in a particular area within the UK or internationally either on a “sole” or “non-exclusive” basis, for a fee therefore spreading their corporate identity and products or services without the expense of setting up new establishments. All franchisees will use a common identity including the name, trademarks, goodwill, other intellectual property and or products of the franchisor. The franchisor will also provide a “Quality Manual” which in effect is a rule book setting out all the relevant detail needed for the successful day-to-day running of the franchised business eg minimum standards and insurance requirements. The agreement will usually include a confidentiality clause protecting all commercially sensitive information and trade secrets from unauthorised disclosure thereby protecting the interests of the franchisor. Why is it important? Franchising has benefits for the franchisor and the franchisee. The franchisor can grow its business without having to open, staff and manage new premises or branches itself whilst the franchisee can manage his/her own business which has been already tested by the franchisor and has access to the franchisor’s experience and expertise. McDonalds and Kentucky Fried Chicken (KFC) operate their own restaurants and food outlets but also grant franchises to others to operate McDonalds and KFC businesses using their logos with McDonalds and Kentucky Fried Chicken exercising tight quality control over the restaurants, their location, food, health and safety etc.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


Reorganisation & Redundancies

Licence to assign


What is it? If you are a landlord of commercial property, and your lease to your tenant includes a provision that says that your tenant cannot assign the lease to another (the “assignee”) without your consent and your tenant wants to assign or transfer their lease obligations to another commercial tenant you need a licence to assign to give them your consent. Why is it important? If the lease absolutely prevents assignment, then you can refuse consent without stating a reason. However, if the lease prohibits assignment without the landlord’s consent the landlord must have a good reason for refusing consent. If the tenant considers that the landlord’s reason is unreasonable the tenant can challenge the refusal in court. A tenant’s request to assign the lease may be made orally, by letter or by email as there is no prescribed form for a tenant’s application for consent to assign. A landlord can charge a tenant a fee to register an assignment. Landlords generally insist that the tenant or lessee gives a guarantee (Authorised Guarantee Agreement “AGA”) in the lease to be responsible for any breaches of covenants by the assignee so that the landlord can claim against the original tenant if the assignee breaches any of its obligations under the lease.




Licence to sublet


What is it? A licence to sublet is an agreement between a landlord and a tenant that gives the tenant the right to sublet part or the whole of the property to another tenant (the “sub-tenant”). If the lease absolutely prevents sub-letting, then you can refuse consent without stating a reason. However, if the lease prohibits sub-letting without the landlord’s consent the landlord must have a good reason for refusing consent. If the tenant considers that the landlord’s reason is unreasonable the tenant can challenge the refusal in court. Why is it important? Where there is a sub-lease the sub-lessee’s landlord is the tenant or lessee so if the sub-lessee breaches its obligations under the sub-lease the lessee or tenant is the only person entitled to take action against the sub-lessee. Landlords generally insist that the sub-tenant joins in the licence to sublet so that the landlord can claim against the sub-tenant if there is any breach of its obligations under the sub-lease.




Sale Agreement


What is it? If you are selling a commercial property, we will prepare the sale contract and related documents, deal with all enquiries raised by the buyer’s solicitors, report to you and advise you and once the contract has been agreed, complete the transaction as quickly and effectively as possible.




Purchase Agreement


What is it? If you are buying a commercial property we will review, amend and advise you on the contract, raise all relevant enquiries, conduct searches, report to you, advise you and then once the parties have agreed the contract complete and register the conveyance as quickly and effectively as possible