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Businesses

Business-to-business contracts


While you may know your rights when it comes to buying goods as a private individual in a shop, many assume that the same rules apply when buying as a business. That’s not always true.

The law treats business-to-business contracts and business-to-consumer contracts differently. These differences include the following:

Distance selling and doorstep selling regulations

Businesses do not get cooling off periods when signing up to contracts at home, on a business premises or at a distance. Unless the contract you have with the company you are purchasing the product from states you have a cooling off period, you will not have one.

Unfair terms

A large part of the legislation relating to unfair terms either do not apply in a business-to-business contract or only applies at the discretion of the court. It is always important therefore to check your terms and conditions prior to signing up to a contract.

Sale of Goods Act and Supply of Goods and Services Act

Most of the Sale of Goods Act and the Supply of Goods and Services Act still applies to business-to-business contracts.

The business does not get an automatic right to a refund if a second fault occurs with a product nor is the burden of proof reversed if there is a dispute as to whether the fault was present at the time of purchase. Instead the court is likely to pick the solution they feel is most reasonable, which might be refund if the product is faulty as soon as it arrives or very shortly afterwards. If the problem occurs later or is an easily remedied problem with a service then the court may choose a free repair as a solution or replacement if that is impossible or would cause a significant inconvenience to you.

However, bear in mind that liability may be limited or excluded by the terms and conditions of a business-to-business contract.

You can claim reasonable business losses if this has not been disclaimed against by the supplier.

Consumer Credit Act

The Consumer Credit Act doesn’t apply to an offer or supply of credit to limited companies, however, it does apply to contracts entered into by sole traders and partnerships.

If you are a business and have any questions, please do not hesitate to get in touch.



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