Before you sign: the five things that cause almost every contract dispute

Almost no dispute is about the price. The price is the one term both sides read twice. The arguments arrive months later, and they are about whether the thing delivered was the thing bought, when the money was supposed to move, and whether either side was allowed to walk away. So read the contract in the order trouble arrives, not front to back: the front is usually the harmless part.

What follows is the law of England and Wales. Northern Ireland largely follows it; Scotland has its own contract law and its own courts, so if the other side is Scottish, these are the questions to ask rather than the answers.

What you are buying, and which document says so

A one-page order that says subject to our standard terms and conditions is not a one-page contract: it is that page plus a document you have probably never opened, and the second one holds the clauses that matter. Ask for it first. And sending your own terms first does not make them the ones that count, because English law tends to give effect to the last set put forward and then acted on. Then find the entire agreement clause, near the end under a dull heading: it makes the signed document the whole of the deal, deleting the emails and everything the salesperson said.

Vague scope favours the side doing the work, so look for what is excluded, what assumptions the price depends on, and any obligation softened to “reasonable endeavours” — a promise to try, not to deliver. Then the acceptance mechanism: if what arrives is wrong, can you reject it, have it redone, or nothing? Many contracts deem work accepted if you say nothing for a set number of days, so silence during a busy fortnight can be the moment you lose your remedy. And a clause requiring variations to be in writing and signed is effective — the Supreme Court settled that in 2018, leaving only a narrow estoppel escape not worth relying on — so the agreement on site to do extra work may bind nobody.

When the money moves is a separate question from how much

Separate the trigger from the period. The trigger is the event that starts the clock: an invoice, a milestone, delivery, or acceptance — and “on acceptance” with a loose test means they control when you get paid. If the contract says nothing about dates, the statutory default fills the gap: payment is late thirty days after the later of the customer receiving the invoice and you performing, and you can then claim statutory interest, set as the Bank of England base rate plus a fixed margin, and a fixed sum towards recovery costs that steps up with the size of the debt. The current rate is on gov.uk, the fixed sums on the next page of that guide.

Long payment terms are, for now, loosely restrained. Public authorities are already held to a shorter agreed payment period than businesses are, and a business-to-business period beyond the sixty-day yardstick is permitted unless it is “grossly unfair” to the supplier, a test almost nobody litigates. That is changing: the Small Business Protections (Late Payments) Bill, which went to Parliament as the Commercial Payments Bill, would make that yardstick a hard ceiling where a large buyer pays a smaller supplier, exempt contracts where both sides are large undertakings or the buyer is the smaller party, and stop a supplier being required to sign away statutory interest. It is not law yet and who counts as large is left to regulations, so check where it has got to when you sign. Watch for a “no set-off” clause too: it means paying in full while you are still claiming for their breach.

How it ends, and what survives it

Read the term and the renewal mechanism together. A fixed term that renews automatically unless notice is given inside a window before it expires is the most expensive innocuous-looking clause in commercial contracting: put that window in your calendar on the day you sign, because missing it by a week can cost a year. Then ask who can terminate for convenience — if only they can, you are carrying the investment — and, on breach, whether it must be material and whether they get time to put it right. If the clause requires a letter to a registered office, an email to your usual contact is not notice. Check too whether ownership of the work passes only on full payment, and whether you get your data back.

The risk clauses: caps, indemnities and the word “consequential”

Compare the liability cap to the size of the thing that could go wrong, not to the contract value: if the cap is a few months of fees and their failure could stop you trading for a month, you are carrying that difference yourself, uninsured. And “consequential loss” does not mean what business people use it to mean. In English contract law it is a narrow technical category, and excluding it does not reliably exclude lost profit; if lost profit is what you mean, the clause has to say so.

An indemnity is different again — a promise to reimburse on demand, sidestepping the usual limits on remoteness and the duty to mitigate — so read every indemnity you give as though you will one day pay it in cash. Two protections hold whatever the contract says: liability for death or personal injury caused by negligence, and for fraud, cannot be excluded; and on the other side’s written standard terms, the Unfair Contract Terms Act 1977 puts their exclusion clauses to a reasonableness test judged as at the date of signing. That last one is a backstop for litigation, not a reason to sign what you can see is unbalanced.

Which court you would use, and whether the other side is worth suing in it

Governing law and jurisdiction are two clauses. Governing law decides whose rules interpret the contract; jurisdiction decides where you have to sue, and a clause sending disputes to a foreign court can make a modest claim commercially dead on arrival. Enforcement across borders improved on 1 July 2025, when the 2019 Hague Judgments Convention came into force for the UK: for proceedings issued on or after that date, English judgments are easier to enforce in the other contracting states, including most of the EU, and it reaches the non-exclusive and asymmetric clauses the 2005 convention does not. If the other side is abroad, check the Hague status table for their country before you rely on an English court.

Then the mistake that costs the most, because a judgment is worth only what the defendant has. Check which legal entity is signing: a trading name is not a company, and the entity on the letterhead is not always the one on the signature block. Search the exact name and number on Companies House, and if the contracting party is a newly formed subsidiary with no assets, ask why, and ask for a guarantee from the parent. A contract with a company that owns nothing is a piece of paper, however well drafted.

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This is general information about how a process works, not advice about your situation. Thresholds, fees and deadlines change — check the official source linked above for the current figures, or ask a professional who can see your circumstances.