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

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.





HR Policies

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.





Protecting your IP

Trademark (UK, EU, US, China)


What is it? One of the best ways of protecting your business name, brand and logo from being copied is to register a trademark. A trademark is a distinctive sign eg name, brand, logo or tagline (or a combination of these) used by a business to distinguish its goods and or services from those sold by another business and to identify its business as the source of those goods and services. In the UK, trademarks are granted by the UK Intellectual Property Office (UK IPO) Registering a trademark increases the protection it receives and stops others from using it. You may be able to register a trademark over:

  • words (eg the trademark “Nandos”)
  • pictures and words (eg the Pure Business Law trademark).
  • slogans (eg the Lidl strap line “Big on quality, Lidl on price”)
  • colours (eg the Cadbury Dairy Milk purple as owned by Kraft ).
  • sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and
  • Logos (eg the Mac OS logo);
  • 3D shapes (eg the Pepsi cola bottle shape)
Why is it important? Registering a name or a logo gives you the following three benefits: Allows you to object if someone else applies to register ay name or logo that is similar to your trademark for the same of similar goods or services. This protection does not cover an application to use the same name or branding for a different type of business. For instance if you register “Fast-Sports” for a trade mark for selling sports cars, no one could register “Fast-Spots” for anything to do with selling cars but they may be able to register it as a trade mark for a dry-cleaning business because that has nothing to do with cars. If another business tries to use the same or similar branding on similar goods or services thereby infringing your trademark you can take legal proceedings to stop them. Your business’s goodwill and reputation have commercial value so registering a trademark is an easy way to protect your hard work and creativity. Registering a trademark gives you the exclusive right to use it for 10 years, after which you must make an application to renew it to the Intellectual Property Office (IPO). Their website is at www.ipo.gov.uk. You can register your trademarks in the UK, the EU and or internationally. All registrations last for 10years and are renewable indefinitely in further 10-year periods. The most suitable registration for your brand will depend on where you do business eg UK, EU or internationally. Risks If you do not register your name, brand or logo as a trademark you will not be able to easily stop other people using your trademark and you may end up allowing other businesses to profit from your hard work.




Patent (Worldwide)


What is it? Protect your invention through a patent. A patent gives you an exclusive right over a novel invention that you have created. It gives you the exclusive right to use and reproduce your invention and stop people copying your invention without your permission. For instance, only Apple can make and sell Apple phones. In the UK, patents are granted by the UK Intellectual Property Office (UK IPO) To have a patent over something you have created, you must register it at the IPO. Patents generally last for up to twenty years. You can only patent a novel invention and cannot patent something that is already in the public domain. This means that your invention must be new (i.e. you cannot patent something which already exists eg a literary work, method of medical treatment, a diagnosis, scientific theory or a discovery) . You also cannot patent something which is already the subject of a patent application pre-dating your application. This means that you must carry out extensive market research examining trade journals and academic papers relevant to your industry market and searching for patents and patent applications on the patent registers worldwide. Obtaining a patent is expensive and time consuming. You should enlist the help of a professional eg lawyer or patent agent before starting an application for a patent. Why is it important?
Should I register my invention as a patent? Yes, you should if you believe that you have created a novel product or process which is so important to your business that you wish to pay a patent application fee to prevent others from using it. Risks Registering your invention as a patent ensures that:

  1. You can prevent others using your product or process if they intend to use it for commercial purposes.
  2. You can profit from your patent by only permitting certain people to use it for commercial purposes and only on condition that they pay you or give you a percentage of the profits they make from using your patent.
Risks If you do not register your invention as a patent, you will not be able to easily stop other people copying your ideas and you may end up allowing other businesses to profit from your hard work. You can use free online databases to search for patents eg Ipsum the UK IPO’s search facility, the Patents Journal (for UK applications that have been filed but not yet published), Espacenet – the European Patents Office’s (EPO’s) free database for worldwide patents including UK patents and Patentscope – the World Intellectual Property Organisation’s (WIPO’s ) free database for worldwide patents including UK patents. Note that these databases may not be up to date. As an alternative you may prefer to use professional search services such as:
  1. The PATLIB (patent library) centre
  2. A Patent attorney through the Chartered Institute of Patent Attorneys at www.cipa.org.uk




IP Assignment Agreement


What is it? An IP assignment agreement transfers rights and ownership in an IP created by one person to someone else or to a business. It can be used to transfer rights in a trademark, patent, logo, designs or any other IP. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work.




Registering Designs


What is it? Register your design to stop someone else from using it. A design right is a right that you have which can protect your original design from being copied by someone else.There are two different types of design rights – registered and unregistered design rights which can protect the look or appearance of a product from being copied. Why is it important? Design rights can exist in computer icons, logos, graphic designs, packaging and clothing. The rights do not arise by reference to the particular product but rather in the shape or look of either the whole of the product or part of that product. For instance, a registered design right in a motif used on a book will be infringed if someone else uses the same design motif on a duvet cover. In the UK, design registrations are granted by the UK Intellectual Property Office (UK IPO). Risks Even if you do not register your design, it will still be automatically protected as an unregistered design right. However this right is more limited right because it only protects you against unauthorised copying and does not prevent other people creating similar designs independently. For businesses in the UK these unregistered design rights arise automatically in the UK and the EU for some designs under both UK and EU law if the relevant criteria are met. In the UK, unregistered design rights arise as soon as the relevant designs are recorded in some way eg in a drawing and in the UK as soon as they are made available to the public. However, the protection granted differs slightly in each jurisdiction. For instance in the UK unregistered design rights will automatically protect either the shape or configuration of the whole or part of an article for up to 15 years, whereas in the EU unregistered design rights will automatically protect not only the appearance of the whole or part of any industrial or handicraft product resulting from its features but also its lines, shape, texture, contours and materials but only for up to 3 years. You should therefor keep a watching brief and consider whether such a right has arisen as soon as you believe that either you or your employees (in the course of their employment) have created an original design. Brexit The UK and the EU have agreed that there will be an implementation period (ie transition period) from the date the UK left the EU i.e. 31 January 2020 until 31 December 2020 or a later date if the transition period is extended. During this period there will be no changes to unregistered design rights. UK unregistered design rights UK unregistered design rights will continue after the transition period and provide up to 15 years of protection. However, after the transition period the UK Government has advised that only UK residents or businesses incorporated in the UK will be eligible for UK registered designs. EU unregistered design rights From the end of the transition period unregistered design rights in the EU (ie unregistered Community designs) will no longer be valid in the IK. The government has advised that it will immediately replace the unregistered Community design rights with UK unregistered design rights ( to be known as UK continuing unregistered design rights) and which will offer protection in the EU and UK for the rest of the three year terms previously attached to the unregistered Community design right. This means you will continue to be protected in the EU and UK for unregistered Community designs that existed before the end of the transition period. If you are concerned about how to protect your unregistered design rights in the UK and EU after the transition period please contact our IP lawyers for further advice on 01234 938089.




Non-Disclosure Agreement (NDA)/Letter of confidentiality


What is it? This agreement protects confidential information belonging to your business including IP and other information which you do not want to be made public. Why is it important? It is important to have an NDA in place before sharing any confidential or sensitive information in business meetings with people with whom you intend to do business eg investors, prospective co-founders, suppliers, consultants and the like. A letter of confidentiality is similar to a non-disclosure agreement. The party disclosing confidential information imposes restrictions as to the use of this confidential information to the party receiving it. Risks If you do not have the required safeguards in place to protect your intellectual property during business meetings or negotiations you may have your designs, inventions or work stolen or copied by the person with whom you are negotiating. This could be disastrous for your business.




one-way confidentiality agreement


What is it? A one-way Confidentiality agreement is similar to a non-disclosure agreement but imposes restrictions as to the use of this confidential information only on one party.




Assignment of intellectual property


What is it? An IP assignment agreement transfers rights and ownership in an IP created by one-person eg trademark, patent, logo, designs or any other IP to someone else or to a business. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work. If you assign IP rights to another business, you are transferring ownership of the IP. It is more common to licence intellectual property rights than to assign them in business. Licensing allows a third party to have rights over the IP and do certain acts with the IP that they would not otherwise have been able to do but you keep ownership of the IP. You can limit the licence to a certain area eg the UK, Middle East, Africa etc or to a certain period of time eg 1 year, 2 years etc. Risks If for example you assign your IP to a business and it fails, you would have lost your IP. If on the other hand you licence your IP to another business, you are in ultimate control and can stipulate how the IP should be used and when it has to be returned. You can also stipulate that the IP be returned to you if the business goes into liquidation or on the happening of certain events.




Copyright


What is it? Copyright is the exclusive right to use and reproduce in public any material you have created if it falls into one of the following categories: i) Written work such as books, plays film scripts, web content, articles, essays, professional opinions, tables, compilations and databases; ii)Artistic works such as paintings, drawings, photos, maps, charts, plan, diagrams etc; iii)sound recordings; iv)Films, music and broadcasts; or v) computer programs. Why is it important? Copyright arises automatically when you create the work so there is no need to register copyright to own a work that you have created. You should be wary of any person that asks you to pay them to register your copyright in a work that you have created as it will be a scam. Businesses as well as individuals can own copyright. Copyright usually lasts for 70 years. You can buy someone’s copyright via a document called a Deed of assignment or give them a licence to use your copyright. As a general rule if an employee creates a work in the course of their employment their employer (ie the business ) will own the work. However, if the work in question is not part of the agreed duties of the employee the employee will own the work. To ensure that copyright work created by employees is owned by the business you should include appropriate intellectual property clauses in your employment contracts. Risks If you commission a piece of work from a freelancer the copyright in the work will belong to the freelancer unless the parties have agreed otherwise. It is important to ensure that the position on ownership of the copyright in writing before work starts to ensure that the business owns the copyright in the work produced by the freelancer.





Business Relationships

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


Running an online business

Trademark (UK, EU, US, China)


What is it? One of the best ways of protecting your business name, brand and logo from being copied is to register a trademark. A trademark is a distinctive sign eg name, brand, logo or tagline (or a combination of these) used by a business to distinguish its goods and or services from those sold by another business and to identify its business as the source of those goods and services. In the UK, trademarks are granted by the UK Intellectual Property Office (UK IPO) Registering a trademark increases the protection it receives and stops others from using it. You may be able to register a trademark over:

  • words (eg the trademark “Nandos”)
  • pictures and words (eg the Pure Business Law trademark).
  • slogans (eg the Lidl strap line “Big on quality, Lidl on price”)
  • colours (eg the Cadbury Dairy Milk purple as owned by Kraft ).
  • sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and
  • Logos (eg the Mac OS logo);
  • 3D shapes (eg the Pepsi cola bottle shape)
Why is it important? Registering a name or a logo gives you the following three benefits: Allows you to object if someone else applies to register ay name or logo that is similar to your trademark for the same of similar goods or services. This protection does not cover an application to use the same name or branding for a different type of business. For instance if you register “Fast-Sports” for a trade mark for selling sports cars, no one could register “Fast-Spots” for anything to do with selling cars but they may be able to register it as a trade mark for a dry-cleaning business because that has nothing to do with cars. If another business tries to use the same or similar branding on similar goods or services thereby infringing your trademark you can take legal proceedings to stop them. Your business’s goodwill and reputation have commercial value so registering a trademark is an easy way to protect your hard work and creativity. Registering a trademark gives you the exclusive right to use it for 10 years, after which you must make an application to renew it to the Intellectual Property Office (IPO). Their website is at www.ipo.gov.uk. You can register your trademarks in the UK, the EU and or internationally. All registrations last for 10years and are renewable indefinitely in further 10-year periods. The most suitable registration for your brand will depend on where you do business eg UK, EU or internationally. Risks If you do not register your name, brand or logo as a trademark you will not be able to easily stop other people using your trademark and you may end up allowing other businesses to profit from your hard work.




Patent (Worldwide)


What is it? Protect your invention through a patent. A patent gives you an exclusive right over a novel invention that you have created. It gives you the exclusive right to use and reproduce your invention and stop people copying your invention without your permission. For instance, only Apple can make and sell Apple phones. In the UK, patents are granted by the UK Intellectual Property Office (UK IPO) To have a patent over something you have created, you must register it at the IPO. Patents generally last for up to twenty years. You can only patent a novel invention and cannot patent something that is already in the public domain. This means that your invention must be new (i.e. you cannot patent something which already exists eg a literary work, method of medical treatment, a diagnosis, scientific theory or a discovery) . You also cannot patent something which is already the subject of a patent application pre-dating your application. This means that you must carry out extensive market research examining trade journals and academic papers relevant to your industry market and searching for patents and patent applications on the patent registers worldwide. Obtaining a patent is expensive and time consuming. You should enlist the help of a professional eg lawyer or patent agent before starting an application for a patent. Why is it important?
Should I register my invention as a patent? Yes, you should if you believe that you have created a novel product or process which is so important to your business that you wish to pay a patent application fee to prevent others from using it. Risks Registering your invention as a patent ensures that:

  1. You can prevent others using your product or process if they intend to use it for commercial purposes.
  2. You can profit from your patent by only permitting certain people to use it for commercial purposes and only on condition that they pay you or give you a percentage of the profits they make from using your patent.
Risks If you do not register your invention as a patent, you will not be able to easily stop other people copying your ideas and you may end up allowing other businesses to profit from your hard work. You can use free online databases to search for patents eg Ipsum the UK IPO’s search facility, the Patents Journal (for UK applications that have been filed but not yet published), Espacenet – the European Patents Office’s (EPO’s) free database for worldwide patents including UK patents and Patentscope – the World Intellectual Property Organisation’s (WIPO’s ) free database for worldwide patents including UK patents. Note that these databases may not be up to date. As an alternative you may prefer to use professional search services such as:
  1. The PATLIB (patent library) centre
  2. A Patent attorney through the Chartered Institute of Patent Attorneys at www.cipa.org.uk




IP Assignment Agreement


What is it? An IP assignment agreement transfers rights and ownership in an IP created by one person to someone else or to a business. It can be used to transfer rights in a trademark, patent, logo, designs or any other IP. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work.




Registering Designs


What is it? Register your design to stop someone else from using it. A design right is a right that you have which can protect your original design from being copied by someone else.There are two different types of design rights – registered and unregistered design rights which can protect the look or appearance of a product from being copied. Why is it important? Design rights can exist in computer icons, logos, graphic designs, packaging and clothing. The rights do not arise by reference to the particular product but rather in the shape or look of either the whole of the product or part of that product. For instance, a registered design right in a motif used on a book will be infringed if someone else uses the same design motif on a duvet cover. In the UK, design registrations are granted by the UK Intellectual Property Office (UK IPO). Risks Even if you do not register your design, it will still be automatically protected as an unregistered design right. However this right is more limited right because it only protects you against unauthorised copying and does not prevent other people creating similar designs independently. For businesses in the UK these unregistered design rights arise automatically in the UK and the EU for some designs under both UK and EU law if the relevant criteria are met. In the UK, unregistered design rights arise as soon as the relevant designs are recorded in some way eg in a drawing and in the UK as soon as they are made available to the public. However, the protection granted differs slightly in each jurisdiction. For instance in the UK unregistered design rights will automatically protect either the shape or configuration of the whole or part of an article for up to 15 years, whereas in the EU unregistered design rights will automatically protect not only the appearance of the whole or part of any industrial or handicraft product resulting from its features but also its lines, shape, texture, contours and materials but only for up to 3 years. You should therefor keep a watching brief and consider whether such a right has arisen as soon as you believe that either you or your employees (in the course of their employment) have created an original design. Brexit The UK and the EU have agreed that there will be an implementation period (ie transition period) from the date the UK left the EU i.e. 31 January 2020 until 31 December 2020 or a later date if the transition period is extended. During this period there will be no changes to unregistered design rights. UK unregistered design rights UK unregistered design rights will continue after the transition period and provide up to 15 years of protection. However, after the transition period the UK Government has advised that only UK residents or businesses incorporated in the UK will be eligible for UK registered designs. EU unregistered design rights From the end of the transition period unregistered design rights in the EU (ie unregistered Community designs) will no longer be valid in the IK. The government has advised that it will immediately replace the unregistered Community design rights with UK unregistered design rights ( to be known as UK continuing unregistered design rights) and which will offer protection in the EU and UK for the rest of the three year terms previously attached to the unregistered Community design right. This means you will continue to be protected in the EU and UK for unregistered Community designs that existed before the end of the transition period. If you are concerned about how to protect your unregistered design rights in the UK and EU after the transition period please contact our IP lawyers for further advice on 01234 938089.




Non-Disclosure Agreement (NDA)/Letter of confidentiality


What is it? This agreement protects confidential information belonging to your business including IP and other information which you do not want to be made public. Why is it important? It is important to have an NDA in place before sharing any confidential or sensitive information in business meetings with people with whom you intend to do business eg investors, prospective co-founders, suppliers, consultants and the like. A letter of confidentiality is similar to a non-disclosure agreement. The party disclosing confidential information imposes restrictions as to the use of this confidential information to the party receiving it. Risks If you do not have the required safeguards in place to protect your intellectual property during business meetings or negotiations you may have your designs, inventions or work stolen or copied by the person with whom you are negotiating. This could be disastrous for your business.




one-way confidentiality agreement


What is it? A one-way Confidentiality agreement is similar to a non-disclosure agreement but imposes restrictions as to the use of this confidential information only on one party.




Assignment of intellectual property


What is it? An IP assignment agreement transfers rights and ownership in an IP created by one-person eg trademark, patent, logo, designs or any other IP to someone else or to a business. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work. If you assign IP rights to another business, you are transferring ownership of the IP. It is more common to licence intellectual property rights than to assign them in business. Licensing allows a third party to have rights over the IP and do certain acts with the IP that they would not otherwise have been able to do but you keep ownership of the IP. You can limit the licence to a certain area eg the UK, Middle East, Africa etc or to a certain period of time eg 1 year, 2 years etc. Risks If for example you assign your IP to a business and it fails, you would have lost your IP. If on the other hand you licence your IP to another business, you are in ultimate control and can stipulate how the IP should be used and when it has to be returned. You can also stipulate that the IP be returned to you if the business goes into liquidation or on the happening of certain events.




Copyright


What is it? Copyright is the exclusive right to use and reproduce in public any material you have created if it falls into one of the following categories: i) Written work such as books, plays film scripts, web content, articles, essays, professional opinions, tables, compilations and databases; ii)Artistic works such as paintings, drawings, photos, maps, charts, plan, diagrams etc; iii)sound recordings; iv)Films, music and broadcasts; or v) computer programs. Why is it important? Copyright arises automatically when you create the work so there is no need to register copyright to own a work that you have created. You should be wary of any person that asks you to pay them to register your copyright in a work that you have created as it will be a scam. Businesses as well as individuals can own copyright. Copyright usually lasts for 70 years. You can buy someone’s copyright via a document called a Deed of assignment or give them a licence to use your copyright. As a general rule if an employee creates a work in the course of their employment their employer (ie the business ) will own the work. However, if the work in question is not part of the agreed duties of the employee the employee will own the work. To ensure that copyright work created by employees is owned by the business you should include appropriate intellectual property clauses in your employment contracts. Risks If you commission a piece of work from a freelancer the copyright in the work will belong to the freelancer unless the parties have agreed otherwise. It is important to ensure that the position on ownership of the copyright in writing before work starts to ensure that the business owns the copyright in the work produced by the freelancer.





Buying & Selling Goods & Services

Terms and conditions for supply of services to business customers


What is it? Terms and conditions set out the rules and specifications which apply in every supply of services that a seller makes and helps to make everyone aware of their rights and obligations from the outset. Why is it important? Make sure you protect your business interests with professionally prepared terms and conditions. When supplying services to a business your terms and conditions should cover issues such as timing and termination of supply, orders, specifications, obligations, pricing, payment, intellectual property, confidentiality, warranties, liability and termination.




Terms and conditions for sale of goods to business customers


What is it? Terms and conditions set out the rules and specifications which apply in every sale of goods that a seller makes and helps to make everyone aware of their rights and obligations from the outset. Why is it important? When selling goods to a business your terms and conditions should cover the nature of products to be sold, orders, delivery, pricing, payment, risk, warranties, defects, liability and confidentiality.




Terms and conditions for supply of services to consumers/businesses


What is it?

There are different terms and conditions for the supply of services to businesses (B2B contracts) and the supply of services to consumers(B2C contracts). When a business deals with a consumer (ie someone who buys goods or services for personal use, as opposed to buying the goods or services on behalf of a business) the consumer is given more legal protection than a business.

Why is it important?

Any business that is entering into a contract with a consumer must abide by a wide range of consumer law requirements such as the Consumer Rights Act 2015, the Sale of Goods Act and Supply of Goods and Services Act , the Consumer Contracts Regulations , the Misrepresentation Act and the Data Protection Act.

Risks

The T&Cs for supply of services to consumers should be used when

  • You are supplying services with or without goods to customers not acting in the course of a business (i.e. consumers).

The T&Cs for supply of services to businesses should be used when

  • You are supplying services with or without goods to customers acting in the course of a business (i.e. Businesses).




Consent Notices


What is it? The law provides that if your website is based in the EU or if you are targeting customers in the EU and your site uses one or more cookies you need to display a cookie consent notice. To comply with the law your need to do three things Let users to your website know that you are using cookies. Provide a link where they can learn more about how you use the data you gather. Provide a way for your website users to consent to the use of cookies. Consent can be explicit opt-in consent and implied consent. For explicit consent, users have to click a button, select a checkbox or complete some other specific activity to opt in to the use of cookies. The most common way to do this is to display a banner at the top or bottom of your website with a link to your Privacy policy and a button to consent to the use of cookies and hide the banner. For implied consent a clear notice must be provided, and the user must be made aware that a specific action will be understood to be implied consent to the use of cookies. One way that implied consent is obtained is by displaying a prominent cookie notice that ends with a statement like “By continuing to use this site you agree to the use of cookies”. The law applies whether a user is on a smartphone, tablet, a laptop, computer or other device. So when you set up your cookie notice you must ensure that the notice appears and functions well on all devices. There are also plugins for Cookie consent notices.




Terms and conditions for sale of goods to consumers/businesses


What is it?

There are different terms and conditions for the sale of goods to businesses (B2B) and the sale of goods to consumers(B2C).

Why is it important?

The T&Cs for sale of goods to consumers should be used when

  • You are supplying goods with or without services to customers not acting in the course of a business (i.e. consumers)

The T&Cs for sale of goods to businesses should be used when

  • You are supplying goods with or without services to customers acting in the course of a business (i.e. businesses)




Terms and conditions for sale of goods to consumers via a website





Terms and conditions for supply of services to consumers via a website





Heads of terms


What is it? This is similar to a Memorandum of Understanding (MOU)s, Term sheet or Letter of intent. The heads of terms set out the key terms agreed by the parties before entering a business transaction. It is not contractually binding. Heads of Terms are usually set out in a letter or document setting out the key terms agreed by parties who intend to enter a binding contract. It is also known as Letter of Intent, a Memorandum of Understanding (MOU) or a Term Sheet. It is a useful tool when two or more parties intend to enter 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 heads of terms which are exceptions to the general approach that heads of terms are not binding: this will occur if the parties put in statements which heads of terms expressly state 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? Heads of terms are 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. The disadvantage of Heads of terms 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. Risks 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 Heads of terms. This creates a very uncertain legal position which may lead to disputes and legal problems.




Letter of intent (LOI)


What is it? A Letter of Intent 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 Memorandum of Understanding (MOU) 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 letter of intent which are exceptions to the general approach that a letter of intent is not binding: this will occur if the parties put in statements which the letter of intent 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? A letter of intent 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. The disadvantage of a letter of intent 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. Risks 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 letter of intent. This creates a very uncertain legal position which may result in disputes and legal problems.




Invoice


What is it? An invoice is a statement setting out the goods and or services that have been supplied by a seller to a buyer and the money owed for those goods and or services. It is created by a seller or supplier to request payment for goods sold and or services provided. It is also called a bill. Why is it important? It identifies the trading partners, specifies the terms of the deal and provides information on the payment figure, the available methods of payment and the payment terms i.e. the maximum amount of time that a buyer had to pay for the goods and or services that they have purchased from the seller.




Sales of goods agreements


What is it?

A Sale of Goods Agreement (sometimes called a Sales Agreement or Sales Contract) is a contract entered into between a buyer and a seller of goods for the sale and purchase of specific goods by the buyer. When you sell goods, you create a sale of goods contract.

Why is it important?

The terms in a sale of goods contract may vary depending on whether it is a sale to a consumer (i.e. a B2C contract ) or a sale to a business (i.e. a “commercial” sale or B2B contract.) A consumer is someone who buys goods or services for personal use, as opposed to buying the goods or services on behalf of a business. Consumers who act as the buyer in a contract for a sale of goods are given more legal protection than businesses. The legal protection is given to help the party considered to be the more vulnerable party to the contract ie the consumer as opposed to the business.

The sale of goods agreement will set out the seller and buyer’s obligations, the terms on which the seller is willing to sell and transfer the goods to the buyer, the nature of the goods to be sold, the price, payment terms, shipping and collection details, delivery time and what happens at the end of the contract.

Risks

A Sale of Goods Agreement can be made orally or in writing. However, having a well-written Sale of Goods Agreement can help protect one or both of the parties if there is a problem with the sale eg goods are late in arriving or the goods have been damaged or destroyed.




Purchase order


What is it? 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. 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 collection 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.




Services agreement


What is it? A Service agreement also known as a Service contract or Contract for Services is a written agreement between a service provider and a customer setting out agreed terms for the supply of services. The terms should include details of the services to be provided, location of provision of the services, payment. Limitation of liability clause, tools or materials to be used, termination of the agreement, ownership of intellectual property clause and dispute resolution clauses. Why is it important? A services agreement is required when a business wants to engage another business to supply services. If your business is the service provider, you should use a service contract whenever you are hired by a customer to complete a service. If you are the customer and the service provider does not supply the contract, you can use a Service agreement to ensure that the terms of the service relationship are clear.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


Managing a company

Trademark (UK, EU, US, China)


What is it? One of the best ways of protecting your business name, brand and logo from being copied is to register a trademark. A trademark is a distinctive sign eg name, brand, logo or tagline (or a combination of these) used by a business to distinguish its goods and or services from those sold by another business and to identify its business as the source of those goods and services. In the UK, trademarks are granted by the UK Intellectual Property Office (UK IPO) Registering a trademark increases the protection it receives and stops others from using it. You may be able to register a trademark over:

  • words (eg the trademark “Nandos”)
  • pictures and words (eg the Pure Business Law trademark).
  • slogans (eg the Lidl strap line “Big on quality, Lidl on price”)
  • colours (eg the Cadbury Dairy Milk purple as owned by Kraft ).
  • sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and
  • Logos (eg the Mac OS logo);
  • 3D shapes (eg the Pepsi cola bottle shape)
Why is it important? Registering a name or a logo gives you the following three benefits: Allows you to object if someone else applies to register ay name or logo that is similar to your trademark for the same of similar goods or services. This protection does not cover an application to use the same name or branding for a different type of business. For instance if you register “Fast-Sports” for a trade mark for selling sports cars, no one could register “Fast-Spots” for anything to do with selling cars but they may be able to register it as a trade mark for a dry-cleaning business because that has nothing to do with cars. If another business tries to use the same or similar branding on similar goods or services thereby infringing your trademark you can take legal proceedings to stop them. Your business’s goodwill and reputation have commercial value so registering a trademark is an easy way to protect your hard work and creativity. Registering a trademark gives you the exclusive right to use it for 10 years, after which you must make an application to renew it to the Intellectual Property Office (IPO). Their website is at www.ipo.gov.uk. You can register your trademarks in the UK, the EU and or internationally. All registrations last for 10years and are renewable indefinitely in further 10-year periods. The most suitable registration for your brand will depend on where you do business eg UK, EU or internationally. Risks If you do not register your name, brand or logo as a trademark you will not be able to easily stop other people using your trademark and you may end up allowing other businesses to profit from your hard work.




Patent (Worldwide)


What is it? Protect your invention through a patent. A patent gives you an exclusive right over a novel invention that you have created. It gives you the exclusive right to use and reproduce your invention and stop people copying your invention without your permission. For instance, only Apple can make and sell Apple phones. In the UK, patents are granted by the UK Intellectual Property Office (UK IPO) To have a patent over something you have created, you must register it at the IPO. Patents generally last for up to twenty years. You can only patent a novel invention and cannot patent something that is already in the public domain. This means that your invention must be new (i.e. you cannot patent something which already exists eg a literary work, method of medical treatment, a diagnosis, scientific theory or a discovery) . You also cannot patent something which is already the subject of a patent application pre-dating your application. This means that you must carry out extensive market research examining trade journals and academic papers relevant to your industry market and searching for patents and patent applications on the patent registers worldwide. Obtaining a patent is expensive and time consuming. You should enlist the help of a professional eg lawyer or patent agent before starting an application for a patent. Why is it important?
Should I register my invention as a patent? Yes, you should if you believe that you have created a novel product or process which is so important to your business that you wish to pay a patent application fee to prevent others from using it. Risks Registering your invention as a patent ensures that:

  1. You can prevent others using your product or process if they intend to use it for commercial purposes.
  2. You can profit from your patent by only permitting certain people to use it for commercial purposes and only on condition that they pay you or give you a percentage of the profits they make from using your patent.
Risks If you do not register your invention as a patent, you will not be able to easily stop other people copying your ideas and you may end up allowing other businesses to profit from your hard work. You can use free online databases to search for patents eg Ipsum the UK IPO’s search facility, the Patents Journal (for UK applications that have been filed but not yet published), Espacenet – the European Patents Office’s (EPO’s) free database for worldwide patents including UK patents and Patentscope – the World Intellectual Property Organisation’s (WIPO’s ) free database for worldwide patents including UK patents. Note that these databases may not be up to date. As an alternative you may prefer to use professional search services such as:
  1. The PATLIB (patent library) centre
  2. A Patent attorney through the Chartered Institute of Patent Attorneys at www.cipa.org.uk




IP Assignment Agreement


What is it? An IP assignment agreement transfers rights and ownership in an IP created by one person to someone else or to a business. It can be used to transfer rights in a trademark, patent, logo, designs or any other IP. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work.




Registering Designs


What is it? Register your design to stop someone else from using it. A design right is a right that you have which can protect your original design from being copied by someone else.There are two different types of design rights – registered and unregistered design rights which can protect the look or appearance of a product from being copied. Why is it important? Design rights can exist in computer icons, logos, graphic designs, packaging and clothing. The rights do not arise by reference to the particular product but rather in the shape or look of either the whole of the product or part of that product. For instance, a registered design right in a motif used on a book will be infringed if someone else uses the same design motif on a duvet cover. In the UK, design registrations are granted by the UK Intellectual Property Office (UK IPO). Risks Even if you do not register your design, it will still be automatically protected as an unregistered design right. However this right is more limited right because it only protects you against unauthorised copying and does not prevent other people creating similar designs independently. For businesses in the UK these unregistered design rights arise automatically in the UK and the EU for some designs under both UK and EU law if the relevant criteria are met. In the UK, unregistered design rights arise as soon as the relevant designs are recorded in some way eg in a drawing and in the UK as soon as they are made available to the public. However, the protection granted differs slightly in each jurisdiction. For instance in the UK unregistered design rights will automatically protect either the shape or configuration of the whole or part of an article for up to 15 years, whereas in the EU unregistered design rights will automatically protect not only the appearance of the whole or part of any industrial or handicraft product resulting from its features but also its lines, shape, texture, contours and materials but only for up to 3 years. You should therefor keep a watching brief and consider whether such a right has arisen as soon as you believe that either you or your employees (in the course of their employment) have created an original design. Brexit The UK and the EU have agreed that there will be an implementation period (ie transition period) from the date the UK left the EU i.e. 31 January 2020 until 31 December 2020 or a later date if the transition period is extended. During this period there will be no changes to unregistered design rights. UK unregistered design rights UK unregistered design rights will continue after the transition period and provide up to 15 years of protection. However, after the transition period the UK Government has advised that only UK residents or businesses incorporated in the UK will be eligible for UK registered designs. EU unregistered design rights From the end of the transition period unregistered design rights in the EU (ie unregistered Community designs) will no longer be valid in the IK. The government has advised that it will immediately replace the unregistered Community design rights with UK unregistered design rights ( to be known as UK continuing unregistered design rights) and which will offer protection in the EU and UK for the rest of the three year terms previously attached to the unregistered Community design right. This means you will continue to be protected in the EU and UK for unregistered Community designs that existed before the end of the transition period. If you are concerned about how to protect your unregistered design rights in the UK and EU after the transition period please contact our IP lawyers for further advice on 01234 938089.




Non-Disclosure Agreement (NDA)/Letter of confidentiality


What is it? This agreement protects confidential information belonging to your business including IP and other information which you do not want to be made public. Why is it important? It is important to have an NDA in place before sharing any confidential or sensitive information in business meetings with people with whom you intend to do business eg investors, prospective co-founders, suppliers, consultants and the like. A letter of confidentiality is similar to a non-disclosure agreement. The party disclosing confidential information imposes restrictions as to the use of this confidential information to the party receiving it. Risks If you do not have the required safeguards in place to protect your intellectual property during business meetings or negotiations you may have your designs, inventions or work stolen or copied by the person with whom you are negotiating. This could be disastrous for your business.




one-way confidentiality agreement


What is it? A one-way Confidentiality agreement is similar to a non-disclosure agreement but imposes restrictions as to the use of this confidential information only on one party.




Assignment of intellectual property


What is it? An IP assignment agreement transfers rights and ownership in an IP created by one-person eg trademark, patent, logo, designs or any other IP to someone else or to a business. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work. If you assign IP rights to another business, you are transferring ownership of the IP. It is more common to licence intellectual property rights than to assign them in business. Licensing allows a third party to have rights over the IP and do certain acts with the IP that they would not otherwise have been able to do but you keep ownership of the IP. You can limit the licence to a certain area eg the UK, Middle East, Africa etc or to a certain period of time eg 1 year, 2 years etc. Risks If for example you assign your IP to a business and it fails, you would have lost your IP. If on the other hand you licence your IP to another business, you are in ultimate control and can stipulate how the IP should be used and when it has to be returned. You can also stipulate that the IP be returned to you if the business goes into liquidation or on the happening of certain events.




Copyright


What is it? Copyright is the exclusive right to use and reproduce in public any material you have created if it falls into one of the following categories: i) Written work such as books, plays film scripts, web content, articles, essays, professional opinions, tables, compilations and databases; ii)Artistic works such as paintings, drawings, photos, maps, charts, plan, diagrams etc; iii)sound recordings; iv)Films, music and broadcasts; or v) computer programs. Why is it important? Copyright arises automatically when you create the work so there is no need to register copyright to own a work that you have created. You should be wary of any person that asks you to pay them to register your copyright in a work that you have created as it will be a scam. Businesses as well as individuals can own copyright. Copyright usually lasts for 70 years. You can buy someone’s copyright via a document called a Deed of assignment or give them a licence to use your copyright. As a general rule if an employee creates a work in the course of their employment their employer (ie the business ) will own the work. However, if the work in question is not part of the agreed duties of the employee the employee will own the work. To ensure that copyright work created by employees is owned by the business you should include appropriate intellectual property clauses in your employment contracts. Risks If you commission a piece of work from a freelancer the copyright in the work will belong to the freelancer unless the parties have agreed otherwise. It is important to ensure that the position on ownership of the copyright in writing before work starts to ensure that the business owns the copyright in the work produced by the freelancer.





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

Terms and conditions for supply of services to business customers


What is it? Terms and conditions set out the rules and specifications which apply in every supply of services that a seller makes and helps to make everyone aware of their rights and obligations from the outset. Why is it important? Make sure you protect your business interests with professionally prepared terms and conditions. When supplying services to a business your terms and conditions should cover issues such as timing and termination of supply, orders, specifications, obligations, pricing, payment, intellectual property, confidentiality, warranties, liability and termination.




Terms and conditions for sale of goods to business customers


What is it? Terms and conditions set out the rules and specifications which apply in every sale of goods that a seller makes and helps to make everyone aware of their rights and obligations from the outset. Why is it important? When selling goods to a business your terms and conditions should cover the nature of products to be sold, orders, delivery, pricing, payment, risk, warranties, defects, liability and confidentiality.




Terms and conditions for supply of services to consumers/businesses


What is it?

There are different terms and conditions for the supply of services to businesses (B2B contracts) and the supply of services to consumers(B2C contracts). When a business deals with a consumer (ie someone who buys goods or services for personal use, as opposed to buying the goods or services on behalf of a business) the consumer is given more legal protection than a business.

Why is it important?

Any business that is entering into a contract with a consumer must abide by a wide range of consumer law requirements such as the Consumer Rights Act 2015, the Sale of Goods Act and Supply of Goods and Services Act , the Consumer Contracts Regulations , the Misrepresentation Act and the Data Protection Act.

Risks

The T&Cs for supply of services to consumers should be used when

  • You are supplying services with or without goods to customers not acting in the course of a business (i.e. consumers).

The T&Cs for supply of services to businesses should be used when

  • You are supplying services with or without goods to customers acting in the course of a business (i.e. Businesses).




Consent Notices


What is it? The law provides that if your website is based in the EU or if you are targeting customers in the EU and your site uses one or more cookies you need to display a cookie consent notice. To comply with the law your need to do three things Let users to your website know that you are using cookies. Provide a link where they can learn more about how you use the data you gather. Provide a way for your website users to consent to the use of cookies. Consent can be explicit opt-in consent and implied consent. For explicit consent, users have to click a button, select a checkbox or complete some other specific activity to opt in to the use of cookies. The most common way to do this is to display a banner at the top or bottom of your website with a link to your Privacy policy and a button to consent to the use of cookies and hide the banner. For implied consent a clear notice must be provided, and the user must be made aware that a specific action will be understood to be implied consent to the use of cookies. One way that implied consent is obtained is by displaying a prominent cookie notice that ends with a statement like “By continuing to use this site you agree to the use of cookies”. The law applies whether a user is on a smartphone, tablet, a laptop, computer or other device. So when you set up your cookie notice you must ensure that the notice appears and functions well on all devices. There are also plugins for Cookie consent notices.




Terms and conditions for sale of goods to consumers/businesses


What is it?

There are different terms and conditions for the sale of goods to businesses (B2B) and the sale of goods to consumers(B2C).

Why is it important?

The T&Cs for sale of goods to consumers should be used when

  • You are supplying goods with or without services to customers not acting in the course of a business (i.e. consumers)

The T&Cs for sale of goods to businesses should be used when

  • You are supplying goods with or without services to customers acting in the course of a business (i.e. businesses)




Terms and conditions for sale of goods to consumers via a website





Terms and conditions for supply of services to consumers via a website





Heads of terms


What is it? This is similar to a Memorandum of Understanding (MOU)s, Term sheet or Letter of intent. The heads of terms set out the key terms agreed by the parties before entering a business transaction. It is not contractually binding. Heads of Terms are usually set out in a letter or document setting out the key terms agreed by parties who intend to enter a binding contract. It is also known as Letter of Intent, a Memorandum of Understanding (MOU) or a Term Sheet. It is a useful tool when two or more parties intend to enter 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 heads of terms which are exceptions to the general approach that heads of terms are not binding: this will occur if the parties put in statements which heads of terms expressly state 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? Heads of terms are 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. The disadvantage of Heads of terms 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. Risks 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 Heads of terms. This creates a very uncertain legal position which may lead to disputes and legal problems.




Letter of intent (LOI)


What is it? A Letter of Intent 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 Memorandum of Understanding (MOU) 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 letter of intent which are exceptions to the general approach that a letter of intent is not binding: this will occur if the parties put in statements which the letter of intent 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? A letter of intent 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. The disadvantage of a letter of intent 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. Risks 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 letter of intent. This creates a very uncertain legal position which may result in disputes and legal problems.




Invoice


What is it? An invoice is a statement setting out the goods and or services that have been supplied by a seller to a buyer and the money owed for those goods and or services. It is created by a seller or supplier to request payment for goods sold and or services provided. It is also called a bill. Why is it important? It identifies the trading partners, specifies the terms of the deal and provides information on the payment figure, the available methods of payment and the payment terms i.e. the maximum amount of time that a buyer had to pay for the goods and or services that they have purchased from the seller.




Sales of goods agreements


What is it?

A Sale of Goods Agreement (sometimes called a Sales Agreement or Sales Contract) is a contract entered into between a buyer and a seller of goods for the sale and purchase of specific goods by the buyer. When you sell goods, you create a sale of goods contract.

Why is it important?

The terms in a sale of goods contract may vary depending on whether it is a sale to a consumer (i.e. a B2C contract ) or a sale to a business (i.e. a “commercial” sale or B2B contract.) A consumer is someone who buys goods or services for personal use, as opposed to buying the goods or services on behalf of a business. Consumers who act as the buyer in a contract for a sale of goods are given more legal protection than businesses. The legal protection is given to help the party considered to be the more vulnerable party to the contract ie the consumer as opposed to the business.

The sale of goods agreement will set out the seller and buyer’s obligations, the terms on which the seller is willing to sell and transfer the goods to the buyer, the nature of the goods to be sold, the price, payment terms, shipping and collection details, delivery time and what happens at the end of the contract.

Risks

A Sale of Goods Agreement can be made orally or in writing. However, having a well-written Sale of Goods Agreement can help protect one or both of the parties if there is a problem with the sale eg goods are late in arriving or the goods have been damaged or destroyed.




Purchase order


What is it? 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. 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 collection 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.




Services agreement


What is it? A Service agreement also known as a Service contract or Contract for Services is a written agreement between a service provider and a customer setting out agreed terms for the supply of services. The terms should include details of the services to be provided, location of provision of the services, payment. Limitation of liability clause, tools or materials to be used, termination of the agreement, ownership of intellectual property clause and dispute resolution clauses. Why is it important? A services agreement is required when a business wants to engage another business to supply services. If your business is the service provider, you should use a service contract whenever you are hired by a customer to complete a service. If you are the customer and the service provider does not supply the contract, you can use a Service agreement to ensure that the terms of the service relationship are clear.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


Letting a commercial property

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.





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

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.





Operating as a Sole Trader

Terms and conditions for supply of services to business customers


What is it? Terms and conditions set out the rules and specifications which apply in every supply of services that a seller makes and helps to make everyone aware of their rights and obligations from the outset. Why is it important? Make sure you protect your business interests with professionally prepared terms and conditions. When supplying services to a business your terms and conditions should cover issues such as timing and termination of supply, orders, specifications, obligations, pricing, payment, intellectual property, confidentiality, warranties, liability and termination.




Terms and conditions for sale of goods to business customers


What is it? Terms and conditions set out the rules and specifications which apply in every sale of goods that a seller makes and helps to make everyone aware of their rights and obligations from the outset. Why is it important? When selling goods to a business your terms and conditions should cover the nature of products to be sold, orders, delivery, pricing, payment, risk, warranties, defects, liability and confidentiality.




Terms and conditions for supply of services to consumers/businesses


What is it?

There are different terms and conditions for the supply of services to businesses (B2B contracts) and the supply of services to consumers(B2C contracts). When a business deals with a consumer (ie someone who buys goods or services for personal use, as opposed to buying the goods or services on behalf of a business) the consumer is given more legal protection than a business.

Why is it important?

Any business that is entering into a contract with a consumer must abide by a wide range of consumer law requirements such as the Consumer Rights Act 2015, the Sale of Goods Act and Supply of Goods and Services Act , the Consumer Contracts Regulations , the Misrepresentation Act and the Data Protection Act.

Risks

The T&Cs for supply of services to consumers should be used when

  • You are supplying services with or without goods to customers not acting in the course of a business (i.e. consumers).

The T&Cs for supply of services to businesses should be used when

  • You are supplying services with or without goods to customers acting in the course of a business (i.e. Businesses).




Consent Notices


What is it? The law provides that if your website is based in the EU or if you are targeting customers in the EU and your site uses one or more cookies you need to display a cookie consent notice. To comply with the law your need to do three things Let users to your website know that you are using cookies. Provide a link where they can learn more about how you use the data you gather. Provide a way for your website users to consent to the use of cookies. Consent can be explicit opt-in consent and implied consent. For explicit consent, users have to click a button, select a checkbox or complete some other specific activity to opt in to the use of cookies. The most common way to do this is to display a banner at the top or bottom of your website with a link to your Privacy policy and a button to consent to the use of cookies and hide the banner. For implied consent a clear notice must be provided, and the user must be made aware that a specific action will be understood to be implied consent to the use of cookies. One way that implied consent is obtained is by displaying a prominent cookie notice that ends with a statement like “By continuing to use this site you agree to the use of cookies”. The law applies whether a user is on a smartphone, tablet, a laptop, computer or other device. So when you set up your cookie notice you must ensure that the notice appears and functions well on all devices. There are also plugins for Cookie consent notices.




Terms and conditions for sale of goods to consumers/businesses


What is it?

There are different terms and conditions for the sale of goods to businesses (B2B) and the sale of goods to consumers(B2C).

Why is it important?

The T&Cs for sale of goods to consumers should be used when

  • You are supplying goods with or without services to customers not acting in the course of a business (i.e. consumers)

The T&Cs for sale of goods to businesses should be used when

  • You are supplying goods with or without services to customers acting in the course of a business (i.e. businesses)




Terms and conditions for sale of goods to consumers via a website





Terms and conditions for supply of services to consumers via a website





Heads of terms


What is it? This is similar to a Memorandum of Understanding (MOU)s, Term sheet or Letter of intent. The heads of terms set out the key terms agreed by the parties before entering a business transaction. It is not contractually binding. Heads of Terms are usually set out in a letter or document setting out the key terms agreed by parties who intend to enter a binding contract. It is also known as Letter of Intent, a Memorandum of Understanding (MOU) or a Term Sheet. It is a useful tool when two or more parties intend to enter 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 heads of terms which are exceptions to the general approach that heads of terms are not binding: this will occur if the parties put in statements which heads of terms expressly state 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? Heads of terms are 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. The disadvantage of Heads of terms 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. Risks 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 Heads of terms. This creates a very uncertain legal position which may lead to disputes and legal problems.




Letter of intent (LOI)


What is it? A Letter of Intent 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 Memorandum of Understanding (MOU) 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 letter of intent which are exceptions to the general approach that a letter of intent is not binding: this will occur if the parties put in statements which the letter of intent 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? A letter of intent 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. The disadvantage of a letter of intent 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. Risks 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 letter of intent. This creates a very uncertain legal position which may result in disputes and legal problems.




Invoice


What is it? An invoice is a statement setting out the goods and or services that have been supplied by a seller to a buyer and the money owed for those goods and or services. It is created by a seller or supplier to request payment for goods sold and or services provided. It is also called a bill. Why is it important? It identifies the trading partners, specifies the terms of the deal and provides information on the payment figure, the available methods of payment and the payment terms i.e. the maximum amount of time that a buyer had to pay for the goods and or services that they have purchased from the seller.




Sales of goods agreements


What is it?

A Sale of Goods Agreement (sometimes called a Sales Agreement or Sales Contract) is a contract entered into between a buyer and a seller of goods for the sale and purchase of specific goods by the buyer. When you sell goods, you create a sale of goods contract.

Why is it important?

The terms in a sale of goods contract may vary depending on whether it is a sale to a consumer (i.e. a B2C contract ) or a sale to a business (i.e. a “commercial” sale or B2B contract.) A consumer is someone who buys goods or services for personal use, as opposed to buying the goods or services on behalf of a business. Consumers who act as the buyer in a contract for a sale of goods are given more legal protection than businesses. The legal protection is given to help the party considered to be the more vulnerable party to the contract ie the consumer as opposed to the business.

The sale of goods agreement will set out the seller and buyer’s obligations, the terms on which the seller is willing to sell and transfer the goods to the buyer, the nature of the goods to be sold, the price, payment terms, shipping and collection details, delivery time and what happens at the end of the contract.

Risks

A Sale of Goods Agreement can be made orally or in writing. However, having a well-written Sale of Goods Agreement can help protect one or both of the parties if there is a problem with the sale eg goods are late in arriving or the goods have been damaged or destroyed.




Purchase order


What is it? 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. 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 collection 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.




Services agreement


What is it? A Service agreement also known as a Service contract or Contract for Services is a written agreement between a service provider and a customer setting out agreed terms for the supply of services. The terms should include details of the services to be provided, location of provision of the services, payment. Limitation of liability clause, tools or materials to be used, termination of the agreement, ownership of intellectual property clause and dispute resolution clauses. Why is it important? A services agreement is required when a business wants to engage another business to supply services. If your business is the service provider, you should use a service contract whenever you are hired by a customer to complete a service. If you are the customer and the service provider does not supply the contract, you can use a Service agreement to ensure that the terms of the service relationship are clear.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


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

Health and safety policy


What is it? A health and safety policy states the employer’s commitment to protect employees’ health and safety and to cooperate with other parties such as employees, supervisors, the health and safety representative to ensure a safe work environment.If you have five or more employees, you are legally required to have a written health and safety policy. Why is it important? If you do not have a written policy the Health and Safety Executive (HSE) can take action against you and prosecute you. Even if you do not have five employees it is best practice to have a written health and safety policy to make your health and safety arrangements clear. Consideration of the health, safety and welfare of staff is an integral part of the management process. The purpose of a Health and Safety policy is to establish general standards for health and safety at work and to distribute responsibility for their achievement to all managers, supervisors and other employees through the normal line management processes. Risks Managers must approach health and safety in a systematic way, by identifying hazards and problems, planning improvements, taking executive action and monitoring results. There should be an annual audit and regular risk assessments.





 
 
 
 

Planning & Highways

Trademark (UK, EU, US, China)


What is it? One of the best ways of protecting your business name, brand and logo from being copied is to register a trademark. A trademark is a distinctive sign eg name, brand, logo or tagline (or a combination of these) used by a business to distinguish its goods and or services from those sold by another business and to identify its business as the source of those goods and services. In the UK, trademarks are granted by the UK Intellectual Property Office (UK IPO) Registering a trademark increases the protection it receives and stops others from using it. You may be able to register a trademark over:

  • words (eg the trademark “Nandos”)
  • pictures and words (eg the Pure Business Law trademark).
  • slogans (eg the Lidl strap line “Big on quality, Lidl on price”)
  • colours (eg the Cadbury Dairy Milk purple as owned by Kraft ).
  • sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and
  • Logos (eg the Mac OS logo);
  • 3D shapes (eg the Pepsi cola bottle shape)
Why is it important? Registering a name or a logo gives you the following three benefits: Allows you to object if someone else applies to register ay name or logo that is similar to your trademark for the same of similar goods or services. This protection does not cover an application to use the same name or branding for a different type of business. For instance if you register “Fast-Sports” for a trade mark for selling sports cars, no one could register “Fast-Spots” for anything to do with selling cars but they may be able to register it as a trade mark for a dry-cleaning business because that has nothing to do with cars. If another business tries to use the same or similar branding on similar goods or services thereby infringing your trademark you can take legal proceedings to stop them. Your business’s goodwill and reputation have commercial value so registering a trademark is an easy way to protect your hard work and creativity. Registering a trademark gives you the exclusive right to use it for 10 years, after which you must make an application to renew it to the Intellectual Property Office (IPO). Their website is at www.ipo.gov.uk. You can register your trademarks in the UK, the EU and or internationally. All registrations last for 10years and are renewable indefinitely in further 10-year periods. The most suitable registration for your brand will depend on where you do business eg UK, EU or internationally. Risks If you do not register your name, brand or logo as a trademark you will not be able to easily stop other people using your trademark and you may end up allowing other businesses to profit from your hard work.




Patent (Worldwide)


What is it? Protect your invention through a patent. A patent gives you an exclusive right over a novel invention that you have created. It gives you the exclusive right to use and reproduce your invention and stop people copying your invention without your permission. For instance, only Apple can make and sell Apple phones. In the UK, patents are granted by the UK Intellectual Property Office (UK IPO) To have a patent over something you have created, you must register it at the IPO. Patents generally last for up to twenty years. You can only patent a novel invention and cannot patent something that is already in the public domain. This means that your invention must be new (i.e. you cannot patent something which already exists eg a literary work, method of medical treatment, a diagnosis, scientific theory or a discovery) . You also cannot patent something which is already the subject of a patent application pre-dating your application. This means that you must carry out extensive market research examining trade journals and academic papers relevant to your industry market and searching for patents and patent applications on the patent registers worldwide. Obtaining a patent is expensive and time consuming. You should enlist the help of a professional eg lawyer or patent agent before starting an application for a patent. Why is it important?
Should I register my invention as a patent? Yes, you should if you believe that you have created a novel product or process which is so important to your business that you wish to pay a patent application fee to prevent others from using it. Risks Registering your invention as a patent ensures that:

  1. You can prevent others using your product or process if they intend to use it for commercial purposes.
  2. You can profit from your patent by only permitting certain people to use it for commercial purposes and only on condition that they pay you or give you a percentage of the profits they make from using your patent.
Risks If you do not register your invention as a patent, you will not be able to easily stop other people copying your ideas and you may end up allowing other businesses to profit from your hard work. You can use free online databases to search for patents eg Ipsum the UK IPO’s search facility, the Patents Journal (for UK applications that have been filed but not yet published), Espacenet – the European Patents Office’s (EPO’s) free database for worldwide patents including UK patents and Patentscope – the World Intellectual Property Organisation’s (WIPO’s ) free database for worldwide patents including UK patents. Note that these databases may not be up to date. As an alternative you may prefer to use professional search services such as:
  1. The PATLIB (patent library) centre
  2. A Patent attorney through the Chartered Institute of Patent Attorneys at www.cipa.org.uk




IP Assignment Agreement


What is it? An IP assignment agreement transfers rights and ownership in an IP created by one person to someone else or to a business. It can be used to transfer rights in a trademark, patent, logo, designs or any other IP. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work.




Registering Designs


What is it? Register your design to stop someone else from using it. A design right is a right that you have which can protect your original design from being copied by someone else.There are two different types of design rights – registered and unregistered design rights which can protect the look or appearance of a product from being copied. Why is it important? Design rights can exist in computer icons, logos, graphic designs, packaging and clothing. The rights do not arise by reference to the particular product but rather in the shape or look of either the whole of the product or part of that product. For instance, a registered design right in a motif used on a book will be infringed if someone else uses the same design motif on a duvet cover. In the UK, design registrations are granted by the UK Intellectual Property Office (UK IPO). Risks Even if you do not register your design, it will still be automatically protected as an unregistered design right. However this right is more limited right because it only protects you against unauthorised copying and does not prevent other people creating similar designs independently. For businesses in the UK these unregistered design rights arise automatically in the UK and the EU for some designs under both UK and EU law if the relevant criteria are met. In the UK, unregistered design rights arise as soon as the relevant designs are recorded in some way eg in a drawing and in the UK as soon as they are made available to the public. However, the protection granted differs slightly in each jurisdiction. For instance in the UK unregistered design rights will automatically protect either the shape or configuration of the whole or part of an article for up to 15 years, whereas in the EU unregistered design rights will automatically protect not only the appearance of the whole or part of any industrial or handicraft product resulting from its features but also its lines, shape, texture, contours and materials but only for up to 3 years. You should therefor keep a watching brief and consider whether such a right has arisen as soon as you believe that either you or your employees (in the course of their employment) have created an original design. Brexit The UK and the EU have agreed that there will be an implementation period (ie transition period) from the date the UK left the EU i.e. 31 January 2020 until 31 December 2020 or a later date if the transition period is extended. During this period there will be no changes to unregistered design rights. UK unregistered design rights UK unregistered design rights will continue after the transition period and provide up to 15 years of protection. However, after the transition period the UK Government has advised that only UK residents or businesses incorporated in the UK will be eligible for UK registered designs. EU unregistered design rights From the end of the transition period unregistered design rights in the EU (ie unregistered Community designs) will no longer be valid in the IK. The government has advised that it will immediately replace the unregistered Community design rights with UK unregistered design rights ( to be known as UK continuing unregistered design rights) and which will offer protection in the EU and UK for the rest of the three year terms previously attached to the unregistered Community design right. This means you will continue to be protected in the EU and UK for unregistered Community designs that existed before the end of the transition period. If you are concerned about how to protect your unregistered design rights in the UK and EU after the transition period please contact our IP lawyers for further advice on 01234 938089.




Non-Disclosure Agreement (NDA)/Letter of confidentiality


What is it? This agreement protects confidential information belonging to your business including IP and other information which you do not want to be made public. Why is it important? It is important to have an NDA in place before sharing any confidential or sensitive information in business meetings with people with whom you intend to do business eg investors, prospective co-founders, suppliers, consultants and the like. A letter of confidentiality is similar to a non-disclosure agreement. The party disclosing confidential information imposes restrictions as to the use of this confidential information to the party receiving it. Risks If you do not have the required safeguards in place to protect your intellectual property during business meetings or negotiations you may have your designs, inventions or work stolen or copied by the person with whom you are negotiating. This could be disastrous for your business.




one-way confidentiality agreement


What is it? A one-way Confidentiality agreement is similar to a non-disclosure agreement but imposes restrictions as to the use of this confidential information only on one party.




Assignment of intellectual property


What is it? An IP assignment agreement transfers rights and ownership in an IP created by one-person eg trademark, patent, logo, designs or any other IP to someone else or to a business. Why is it important? An IP assignment agreement is important when a business is sold, and the founder created intellectual property before becoming a part of the company or a company employs a someone whether consultant or employee to do some work. If you assign IP rights to another business, you are transferring ownership of the IP. It is more common to licence intellectual property rights than to assign them in business. Licensing allows a third party to have rights over the IP and do certain acts with the IP that they would not otherwise have been able to do but you keep ownership of the IP. You can limit the licence to a certain area eg the UK, Middle East, Africa etc or to a certain period of time eg 1 year, 2 years etc. Risks If for example you assign your IP to a business and it fails, you would have lost your IP. If on the other hand you licence your IP to another business, you are in ultimate control and can stipulate how the IP should be used and when it has to be returned. You can also stipulate that the IP be returned to you if the business goes into liquidation or on the happening of certain events.




Copyright


What is it? Copyright is the exclusive right to use and reproduce in public any material you have created if it falls into one of the following categories: i) Written work such as books, plays film scripts, web content, articles, essays, professional opinions, tables, compilations and databases; ii)Artistic works such as paintings, drawings, photos, maps, charts, plan, diagrams etc; iii)sound recordings; iv)Films, music and broadcasts; or v) computer programs. Why is it important? Copyright arises automatically when you create the work so there is no need to register copyright to own a work that you have created. You should be wary of any person that asks you to pay them to register your copyright in a work that you have created as it will be a scam. Businesses as well as individuals can own copyright. Copyright usually lasts for 70 years. You can buy someone’s copyright via a document called a Deed of assignment or give them a licence to use your copyright. As a general rule if an employee creates a work in the course of their employment their employer (ie the business ) will own the work. However, if the work in question is not part of the agreed duties of the employee the employee will own the work. To ensure that copyright work created by employees is owned by the business you should include appropriate intellectual property clauses in your employment contracts. Risks If you commission a piece of work from a freelancer the copyright in the work will belong to the freelancer unless the parties have agreed otherwise. It is important to ensure that the position on ownership of the copyright in writing before work starts to ensure that the business owns the copyright in the work produced by the freelancer.





 

Managing employee performance

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.





Reorganisation & Redundancies

Terms and conditions for supply of services to business customers


What is it? Terms and conditions set out the rules and specifications which apply in every supply of services that a seller makes and helps to make everyone aware of their rights and obligations from the outset. Why is it important? Make sure you protect your business interests with professionally prepared terms and conditions. When supplying services to a business your terms and conditions should cover issues such as timing and termination of supply, orders, specifications, obligations, pricing, payment, intellectual property, confidentiality, warranties, liability and termination.




Terms and conditions for sale of goods to business customers


What is it? Terms and conditions set out the rules and specifications which apply in every sale of goods that a seller makes and helps to make everyone aware of their rights and obligations from the outset. Why is it important? When selling goods to a business your terms and conditions should cover the nature of products to be sold, orders, delivery, pricing, payment, risk, warranties, defects, liability and confidentiality.




Terms and conditions for supply of services to consumers/businesses


What is it?

There are different terms and conditions for the supply of services to businesses (B2B contracts) and the supply of services to consumers(B2C contracts). When a business deals with a consumer (ie someone who buys goods or services for personal use, as opposed to buying the goods or services on behalf of a business) the consumer is given more legal protection than a business.

Why is it important?

Any business that is entering into a contract with a consumer must abide by a wide range of consumer law requirements such as the Consumer Rights Act 2015, the Sale of Goods Act and Supply of Goods and Services Act , the Consumer Contracts Regulations , the Misrepresentation Act and the Data Protection Act.

Risks

The T&Cs for supply of services to consumers should be used when

  • You are supplying services with or without goods to customers not acting in the course of a business (i.e. consumers).

The T&Cs for supply of services to businesses should be used when

  • You are supplying services with or without goods to customers acting in the course of a business (i.e. Businesses).




Consent Notices


What is it? The law provides that if your website is based in the EU or if you are targeting customers in the EU and your site uses one or more cookies you need to display a cookie consent notice. To comply with the law your need to do three things Let users to your website know that you are using cookies. Provide a link where they can learn more about how you use the data you gather. Provide a way for your website users to consent to the use of cookies. Consent can be explicit opt-in consent and implied consent. For explicit consent, users have to click a button, select a checkbox or complete some other specific activity to opt in to the use of cookies. The most common way to do this is to display a banner at the top or bottom of your website with a link to your Privacy policy and a button to consent to the use of cookies and hide the banner. For implied consent a clear notice must be provided, and the user must be made aware that a specific action will be understood to be implied consent to the use of cookies. One way that implied consent is obtained is by displaying a prominent cookie notice that ends with a statement like “By continuing to use this site you agree to the use of cookies”. The law applies whether a user is on a smartphone, tablet, a laptop, computer or other device. So when you set up your cookie notice you must ensure that the notice appears and functions well on all devices. There are also plugins for Cookie consent notices.




Terms and conditions for sale of goods to consumers/businesses


What is it?

There are different terms and conditions for the sale of goods to businesses (B2B) and the sale of goods to consumers(B2C).

Why is it important?

The T&Cs for sale of goods to consumers should be used when

  • You are supplying goods with or without services to customers not acting in the course of a business (i.e. consumers)

The T&Cs for sale of goods to businesses should be used when

  • You are supplying goods with or without services to customers acting in the course of a business (i.e. businesses)




Terms and conditions for sale of goods to consumers via a website





Terms and conditions for supply of services to consumers via a website





Heads of terms


What is it? This is similar to a Memorandum of Understanding (MOU)s, Term sheet or Letter of intent. The heads of terms set out the key terms agreed by the parties before entering a business transaction. It is not contractually binding. Heads of Terms are usually set out in a letter or document setting out the key terms agreed by parties who intend to enter a binding contract. It is also known as Letter of Intent, a Memorandum of Understanding (MOU) or a Term Sheet. It is a useful tool when two or more parties intend to enter 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 heads of terms which are exceptions to the general approach that heads of terms are not binding: this will occur if the parties put in statements which heads of terms expressly state 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? Heads of terms are 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. The disadvantage of Heads of terms 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. Risks 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 Heads of terms. This creates a very uncertain legal position which may lead to disputes and legal problems.




Letter of intent (LOI)


What is it? A Letter of Intent 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 Memorandum of Understanding (MOU) 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 letter of intent which are exceptions to the general approach that a letter of intent is not binding: this will occur if the parties put in statements which the letter of intent 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? A letter of intent 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. The disadvantage of a letter of intent 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. Risks 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 letter of intent. This creates a very uncertain legal position which may result in disputes and legal problems.




Invoice


What is it? An invoice is a statement setting out the goods and or services that have been supplied by a seller to a buyer and the money owed for those goods and or services. It is created by a seller or supplier to request payment for goods sold and or services provided. It is also called a bill. Why is it important? It identifies the trading partners, specifies the terms of the deal and provides information on the payment figure, the available methods of payment and the payment terms i.e. the maximum amount of time that a buyer had to pay for the goods and or services that they have purchased from the seller.




Sales of goods agreements


What is it?

A Sale of Goods Agreement (sometimes called a Sales Agreement or Sales Contract) is a contract entered into between a buyer and a seller of goods for the sale and purchase of specific goods by the buyer. When you sell goods, you create a sale of goods contract.

Why is it important?

The terms in a sale of goods contract may vary depending on whether it is a sale to a consumer (i.e. a B2C contract ) or a sale to a business (i.e. a “commercial” sale or B2B contract.) A consumer is someone who buys goods or services for personal use, as opposed to buying the goods or services on behalf of a business. Consumers who act as the buyer in a contract for a sale of goods are given more legal protection than businesses. The legal protection is given to help the party considered to be the more vulnerable party to the contract ie the consumer as opposed to the business.

The sale of goods agreement will set out the seller and buyer’s obligations, the terms on which the seller is willing to sell and transfer the goods to the buyer, the nature of the goods to be sold, the price, payment terms, shipping and collection details, delivery time and what happens at the end of the contract.

Risks

A Sale of Goods Agreement can be made orally or in writing. However, having a well-written Sale of Goods Agreement can help protect one or both of the parties if there is a problem with the sale eg goods are late in arriving or the goods have been damaged or destroyed.




Purchase order


What is it? 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. 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 collection 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.




Services agreement


What is it? A Service agreement also known as a Service contract or Contract for Services is a written agreement between a service provider and a customer setting out agreed terms for the supply of services. The terms should include details of the services to be provided, location of provision of the services, payment. Limitation of liability clause, tools or materials to be used, termination of the agreement, ownership of intellectual property clause and dispute resolution clauses. Why is it important? A services agreement is required when a business wants to engage another business to supply services. If your business is the service provider, you should use a service contract whenever you are hired by a customer to complete a service. If you are the customer and the service provider does not supply the contract, you can use a Service agreement to ensure that the terms of the service relationship are clear.





Managing licenses


Running an online business


Protecting your IP


Business Relationships


Writing a business plan


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Negotiating an existing agreement

Changing a contract.

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