3 Most Common Contract Mistakes

Est. 2 min. read

3 Most Common Contract Mistakes

When starting up a business, it's really easy to want to skimp on certain things... including legal documents. Here are the most common mistakes the recruitment companies make when setting up! The Contract Doctor are a one-stop shop for any legal, compliance and back-office services for recruitment agencies and staffing companies.

3 Most Common Contract Mistakes

When starting up a business, it’s really easy to want to skimp on certain things such as legal documents. Unfortunately, while sometimes this might work out, sometimes it can really F*** you up later down the line.

Here are the most common mistakes that some of my clients have made before they started working with us.

1.   Over valuation

So, the first one. We’ve had a client who incorporates his company with a million shares. Which meant that when he brought on a partner and he had a shareholder agreement and he’s there telling this person that his company’s worth a million pounds, it was a bit of a boo boo. Now all that’s gonna do is tell HMRC that you have a company that is worth a million pounds, when actually it’s probably worth f*** all right now.

2.   Inadequate contracts

People either don’t put contracts in place at all, or they beg, borrow, and steal from other people. The problem with this is if you can’t trace where your contracts came from originally and you don’t know if they’ve been professionally drafted, unless you understand every single clause in that contract, you might have duplicate clauses in there, you might have clauses that contradict each other, and should you then ever need to rely on those clauses, they’re gonna be waived by a court.

3.  Amending contracts yourself

Clients amending their own terms without fully understanding the implications. If you have a client that comes to you and they need some minor tweaks to an assignment, you might think that you can go into your contract and amend a clause and it won’t implicate any of the other clauses in that contract. But actually, amending one thing can mean that other clauses that cross-reference that clause, might also need to change. It might seem that all of your legal documents can be marginalized and they’re not that important, but actually they can have a huge impact for you later down the line.
Should you need any help with this, the team and I can definitely help you.

We’re here to help start-ups and SMEs avoid the costs of a traditional law firm with no deterioration in risk.

If you want to discuss anything further, or you need more help with your legals, feel free to get in touch and myself or one of the team can help.