Member Article

Small print is a big issue for businesses

Yorkshire businesses are being warned to check the small print before signing contracts, following several recent high profile cases that have reinforced the stark differences between the consumer and business customer.

One recent case involved a business owner who put his winter sports firm up for a sale with a business transfer agent offering a no sale, no fee service. After 12 months, when a buyer still hadn’t been found the business went into liquidation. The transfer agent claimed they were owed £12,000, as detailed in the contract’s penalty clauses. The dispute ended up in Court and the owner of the winter sports firm was only able to escape liability because his business had gone into liquidation.

The business owner said “I was relying on the ‘no sale, no fee’ advert and their integrity as a business transfer agent to explain their terms.” But, as he found out, the business transfer agent had no obligation to explain anything because he was not a ‘consumer’.

James Sarjantson, Commercial and IP Partner at LCF Law, explains: “It sounds obvious but it’s amazing how many businesses sign documents without checking the small print and this can often end up being a very costly mistake.

“While there is plenty of legislation in place to protect consumers who sign contracts in haste and then decide they want to cancel, the law affecting the business customer is very different. Anyone signing a contract on behalf of a business always needs to be on guard because there is no obligation for terms to be ‘fair’ in a business contract.

“In addition, unscrupulous businesses will often print terms and conditions in such a small font that it is almost unreadable or use longwinded sentences with very little punctuation, making it even more difficult for the person signing it to understand what is being said.”

Finally James adds: “Any businesses that are unsure about the small print on a document should always consult a solicitor because there is no doubt that terms and conditions can be a huge minefield. Most solicitors will charge a fixed fee for this type of work and will explain or seek to clarify any areas that are confusing, full of jargon or ambiguous.”

LCF specialises in corporate, property, dispute resolution and personal law. To find out more visit www.lcf.co.uk

This was posted in Bdaily's Members' News section by Emma Mortimer .