Not just the who and the what, but also the where and the how!
If you’re going doing business with new parties, the first thing you might think about is whether they are going to do a good job if they are your client, and whether they have the money to pay you, if you are their client. These are all good sensible things to consider.
However, as we become an increasingly global market, do you also consider where the work is being done, and how you will enforce the terms of the contract if you are in different countries. What happens if the registered office address of the other side changes after the contract has started. What countries law takes priority and how would that countries laws affect your ability to take action. For example, did you know that in America, you cannot recover your costs in relation to a contract dispute unless it is provided for in the contract. Whereas in the UK the court decides on costs matters, and will usually award costs in favour of the successful party even if the contract is silent on the point.
It is something that is becoming increasingly more important, and yet still companies are failing to address it at the outset, to their detriment. A long running dispute between a worldwide bank and its former chairman who is accused of stealing billions is a good example of how tricky and expensive this area of law can be. The bank has recently obtained a ruling that the UK courts have jurisdiction, not because it was found to be in the right, but because on balance it had a better argument than the former chairman. It could easily have gone the other way, with huge sums at stake, not least of all the legal fees.
Whilst you may not be involved in matters which could lead to disputes on this kind of scale, the uncertainty in the law and the costs involved in reaching a resolution means it’s all the more important for you to know what you’re options and risks are going in.
If you are doing business with anyone, inside or outside the UK, you should make sure that your ts and cs or contract clearly state which court has jurisdiction. You also need to check that there is nothing in the other side’s paperwork that contradicts that. If you’d like to have a chat about courts near and far, drop me a line at Stephanie@kleymansolicitors.com, and we’ll agree on a mutually convenient location.
Kleyman & Co Solicitors. The full service law firm. Any time, any place, anywhere!