25-03-2009
Difficult times call for sensible measures
Commercial law expert Iain Garfield is urging business owners in the South West to review their company’s contractual position as the world of credit insurance becomes increasingly difficult.
As businesses in the region find it harder to obtain credit insurance, the risk of supplying goods to customers is increasing, as more and more companies go out of business.
Iain Garfield, a specialist in commercial contracts at Cheltenham-based BPE Solicitors, says suppliers are being forced to look for other ways to protect their businesses and, perhaps most importantly, their revenue and cash-flow.
“Manufacturers and suppliers in the region should be reviewing their trading contracts, and in particular retention of title clauses, which can represent a weapon in a seller’s armoury in cases of the buyer’s insolvency,” said Iain, a member of the Chartered Institute of Purchasing and Supply.
“Since being introduced almost forty years ago retention of title clauses have become an integral part of supply contracts. They must be sufficiently detailed in order to protect the seller as much as possible, but not so detailed as to move the clause from a simple retention of title to a legal charge. Hence “one-size-fits-all” is somewhat far from the truth,” he added.
Iain warns that in a world where more is usually considered to be better, retention of title clauses are an anathema.
“Ideally such clauses should be ideally tailored to the specific business relationship, particularly in the world of international trade where the laws of other countries interpret such clauses differently,” said Iain.
“Particularly when negotiating the supply of valuable goods to a buyer it would be worth investing time and money in reviewing your business’ contractual position,” he added.
As businesses in the region find it harder to obtain credit insurance, the risk of supplying goods to customers is increasing, as more and more companies go out of business.
Iain Garfield, a specialist in commercial contracts at Cheltenham-based BPE Solicitors, says suppliers are being forced to look for other ways to protect their businesses and, perhaps most importantly, their revenue and cash-flow.
“Manufacturers and suppliers in the region should be reviewing their trading contracts, and in particular retention of title clauses, which can represent a weapon in a seller’s armoury in cases of the buyer’s insolvency,” said Iain, a member of the Chartered Institute of Purchasing and Supply.
“Since being introduced almost forty years ago retention of title clauses have become an integral part of supply contracts. They must be sufficiently detailed in order to protect the seller as much as possible, but not so detailed as to move the clause from a simple retention of title to a legal charge. Hence “one-size-fits-all” is somewhat far from the truth,” he added.
Iain warns that in a world where more is usually considered to be better, retention of title clauses are an anathema.
“Ideally such clauses should be ideally tailored to the specific business relationship, particularly in the world of international trade where the laws of other countries interpret such clauses differently,” said Iain.
“Particularly when negotiating the supply of valuable goods to a buyer it would be worth investing time and money in reviewing your business’ contractual position,” he added.
