Why a Handshake Isn't Enough

Most disputes between small businesses and their suppliers or clients do not begin with dishonesty. They begin with assumptions. One side believed the price included delivery; the other thought it was collection only. One side expected revisions within the fee; the other assumed each round would be charged separately. A written contract is not a sign that you distrust someone — it is simply a record of what you both agreed, made while everyone is still friendly and the details are fresh.

In the UK, a contract can be formed verbally or by a quick email, but proving what was agreed is another matter. If a relationship sours, a court or tribunal will look for evidence, and a vague memory is a poor substitute. The good news is that a contract does not need to be long or stuffed with jargon. A clear one-page agreement in plain English will prevent more trouble than a twenty-page template nobody has read.

Start with the Deliverables

Before you think about clauses, describe what is actually being bought and sold. Ask yourself what a stranger would need to know to deliver this job correctly.

• What is being supplied — the product, the service, quantities, and the standard expected.
• When it is needed — start dates, milestones, delivery windows, notice periods for site access.
• How it will be delivered — format, location, packaging, and who covers carriage.
• What is not included — out-of-scope work, exclusions, and anything you would charge extra for.

That last point matters more than most people expect. Writing down what you are not doing removes the awkward conversation later, when a client asks for "just one more thing" that would take two days.

Get the Payment Terms Clear

Money is where good relationships go wrong most often. Set out the total price, how it is calculated, when invoices are raised and how long the client has to pay. Thirty days is common, but fourteen or seven is perfectly reasonable if both sides agree — and for smaller jobs, payment on completion or in staged instalments often suits everyone better. Be specific about who the invoice goes to, what reference to quote, and what happens if part of an invoice is disputed. If you are VAT registered, state whether prices include VAT.

Suppliers should know their legal position too. Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge statutory interest on overdue business-to-business invoices — currently 8% above the Bank of England base rate — plus fixed compensation that rises with the size of the debt. Referencing this in your terms is not aggressive; it simply sets expectations. If your customer is a consumer rather than a business, different rules apply, including statutory cancellation rights, so make sure your terms suit the client in front of you.

Agree How Changes Will Be Handled

Nearly every project changes shape. A good contract accepts that and says how variations will work: who can request one, that it must be confirmed in writing, how the extra cost and time will be quoted, and that work on the change does not begin until both sides accept the revised figures. Without a variation clause, extras quietly become free work. With one, the conversation stays commercial rather than personal — you are not being difficult, you are following the process you both signed up to.

Write an Exit Arrangement You Would Actually Use

Exit terms feel pessimistic, which is why they are so often skipped. They are also the clauses that save the most money. Cover the notice period either side must give, what happens to work in progress, how materials or data are handed back, and when the final invoice falls due. If there is a fee for ending early, say so plainly and keep it proportionate.

Decide what counts as a serious breach and what remedy follows, and give both sides a route out if the relationship simply stops working. Keep it fair: heavily one-sided terms may be unenforceable, especially where a consumer is involved, and an unfair term can be struck out entirely. A balanced exit clause is more useful than a punishing one, because it is far more likely to hold up.

Making It Work Day to Day

A contract is only valuable if you can find it and understand it when you need it.

• Keep one master agreement with each supplier or client, plus short statements of work for individual jobs.
• Store signed copies, including email approvals, somewhere you can actually search.
• Follow up verbal agreements with a same-day email summary: "Just confirming we agreed X for Y."
• Review your template once a year, or whenever your prices, scope or insurance change.
• Have a solicitor check your core document once — a one-off cost that pays for itself many times over.

None of this needs to be formal or intimidating. Contracts work best when they read like a clear summary of a sensible conversation: here is what we are doing, here is what it costs, here is what happens if things change, and here is how we part company if we need to. Get that on one page, in plain English, before the work starts — and you will spend your time building the business rather than arguing about it.