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New Year, new goals. New objectives, new challenges.  And for some of us, 2025 will be the year that we start our New Business!

The Merits of Commercial Agreements for Small Business Owners

Starting a business is an exciting journey, but it's one that comes with a few tribulations, especially when it comes to managing your relationships with customers, suppliers, and partners. It is essential that you minimise risk with any new venture, and one key issue to focus on is how you use commercial agreements. These legal documents aren’t just for big companies — they’re an essential tool for every small business. By having clear, legally sound agreements in place, you can protect your interests, avoid costly disputes, and focus on growing your business with confidence.

Clarity and Protection

As a new business owner, you’ll soon find that misunderstandings can be costly. Having a written business contract in place provides clarity by clearly outlining the roles, responsibilities, and expectations of everyone involved. This is especially important when you’re working with partners or suppliers for the first time. You’ll want to avoid any confusion about timelines, payments, or delivery terms. The contract ensures all parties are aligned from the start, preventing issues that could slow down your business growth.

A key example of this principle in action was highlighted in the MWB Business Exchange Centres Ltd v Rock Advertising Ltd case, which highlighted the importance of properly documenting changes to a contract. The court ruled that because informal or verbal agreements without formal documentation can cause confusion, they are hard to enforce. For anyone starting a business, this is a reminder that even small agreements need to be formalised to ensure they hold up legally.

Managing Risk

Starting a business often involves taking risks, but those risks can be controlled and managed with the right tools. Commercial agreements can help you identify potential risks upfront and outline what happens if things go wrong. For example, if a supplier doesn’t deliver on time, your agreement can stipulate the consequences, such as penalties or compensation. These agreements offer a safety net, helping you avoid costly mistakes that could otherwise harm your business.

However, the Cavendish Square Holding v Talal El Makdessi case reminded us that even penalties in commercial contracts must be fair and reasonable. This means when drafting your agreements, it’s important to ensure they’re balanced and realistic, protecting your business without putting unnecessary strain on your relationships with others.

Building Strong Business Relationships

Another benefit of using commercial agreements is that they help foster trust and professionalism. When you work with customers, suppliers, or partners, a clear agreement shows that you are serious about your business. It sets the tone for a respectful, transparent working relationship, which can lead to long-term success. By setting clear expectations, everyone knows where they stand, which reduces the chance of misunderstandings that could jeopardise a valuable business relationship.

Staying Compliant with the Law

Commercial agreements also play an important role in ensuring your business stays on the right side of the law. Whether it’s protecting customer data, complying with consumer rights, or managing intellectual property, there are legal requirements that every small business must follow. Having the right agreements in place ensures your business complies with these rules, preventing legal trouble down the line. The case of Google Inc. v Vidal-Hall reinforced how important it is to stay up-to-date with privacy laws, especially when dealing with sensitive customer information.

Take the Next Step

Starting a business is about more than just offering a great product or service—it’s about building a strong, sustainable foundation for your success. By using commercial agreements, you protect yourself and your business while demonstrating professionalism. These agreements give you the clarity, security, and peace of mind you need to focus on growing your business.

So, if you’re ready to take the next step in your entrepreneurial journey, consider how utilising commercial law can be a powerful tool to support you. Starting your business with the right agreements can set you up for success, allowing you to build trust, manage risk, and stay compliant. With the right legal foundation, you’re one step closer to achieving your dreams as a small business owner.

Gerard LeCain brings a number of years of Commercial Law Experience to his new role as part of Curwens’ Company & Commercial Law Team. Curwens are available to assist you with a diverse array of company Law matters, including commercial contracts, share purchase agreements and Corporate and Commercial Real Estate matters.

If you require advice or legal assistance, please contact Gerard LeCain on 020 8363 4444 or This email address is being protected from spambots. You need JavaScript enabled to view it.