Negotiate

Leading on from the above, it is vital that parties negotiate terms that are not initially acceptable to them. 

Clear communication is key and it is always advisable to follow-up any verbal communication in writing (see mantra number one above).

Sometimes if the parties have unequal bargaining power, negotiating contract terms might be difficult to do, but if the other party is intransigent in response to reasonable negotiation, ask yourself whether you actually want to do business with them at all.

Take advice if concerned

As they say, forewarned is forearmed, and it can prove invaluable (and a cost-saving in the long run) to take legal advice on a contract before entering into it.  

A lawyer will be able to advise you on the risks and potential consequences of particular clauses as well as to re-draft anything that is unfavourable. 

For example, a lawyer will advise you on what the difference is between 'best endeavours' and 'reasonable endeavours' and why this matters.  

Lawyer to lawyer negotiation of contract terms can also be more effective, particularly in an unequal bargaining power situation.

There is always a degree of risk when entering into a commercial contract, whether with someone new or otherwise. 

The key to minimise risk is to be aware of it from the outset and to take mitigating steps accordingly.

Jenifer Martindale is a partner at Wilsons Solicitors