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Do you want to create a business on your terms?

I was talking to someone yesterday about the effect the Uber decision is going to have on his business.   He came up with an interesting response:

contract terms

“If my service providers are really in business for themselves – isn’t it up to them to provide terms of trade?”

Control v Clarity

He was thinking that by issuing the terms on which he was prepared to buy services, he might somehow be straying into ‘control’.  He knew enough about it to know that was a  ‘bad thing’.  He felt that by controlling nothing he could demonstrate that the people he paid were really in business.

Should you be concerned about this too?

Test of who is a contractor running their own business and who is a worker (or an employee) is not about who provided the terms of trade.

Control is not about who wrote it down

The tests for who is your worker and who is your employee are based on things like control, substitution, who is really ‘risking’ what.   That’s how Uber came unstuck.  It was the amount of control they exercised and how they operated that has lead them into court.

Clarity of terms is easier

If your agreement is written down and it meets the relevant tests you will find it a lot easier to deal with the way we work today.  We call it the duck test!

You are the one who needs to sort this out

Running a business is not like being a consumer.  There aren’t so many laws to protect you.  It is more a case of ‘buyer beware’.

    1. There is no duty on your supplier to protect you
    2. You’re the person who needs to make sure it is all correct​
    3. It’s your job to provide proper data processing instructions for GDPR
    4. It’s your job to provide security instructions for data processing

We often tell our customers

You can outsource the work, but you can’t outsource the responsibility

You should read their terms of business and make sure they contain everything you think they should.   You will be in for some suprises.

Your business suppliers terms are there to protect them

Your supplier has no obligation to create contract terms that are fair to you, or keep you out of trouble with HMRC, the employment tribunal, or even assign to you the rights you think you have anyway.  And by the way, you don’t have copyright in work done by a freelancer because you paid them – there is more to it than that!

If you are thinking like this, you are still thinking like a consumer with all the laws that protect consumers from coming unstuck.  But business to business contracts do not often come within those protections.

If you are relying on them to protect you from harm later on – then you may come sadly unstuck!  If you want a scalable, saleable business with no nasty surprises, you are going to have to make this part of how you operate.

What if neither of you has a standard set of terms?

If your supplier has no terms of trade (and that is surprisingly common) then any dispute between you will have to be resolved by a lengthy investigation of emails, what you normally do, what they normally do, how you work.  All too often neither of you have discussed something that turned out to be really important.

By the time you are unhappy it is too late to fix the gap.  It is much easier to sort all this out before you get going.

You need a plan for starting and a plan for ending

All too often there is no plan for who owns what, who returns what, and who can do what when the work is done.

Save time and get some team hiring terms

Use our team hiring agreements to set up secure arrangements for your business and your data that work for both of you.   You can choose from the UK range (if you and your supplier are both in the UK) or the Global range if one of you is not.

By the time you have got a team of your own, you won’t have time to be reading everybody’s different terms and contracts.  You will find it easier to have a core set of terms that sets out the way you work with everyone you pay.  And you will be far too busy to worry about cross-border data transfers, tax withholding, and more!

You will need something that talks you through what you need to do, so you are always the boss and can stay in the driving seat, but comes with support for those awkward moments when things don’t work the way you expected them to.

Find out more on our Team Hiring page.

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