Commercial Law New Starter Guide

Commercial Law Starter Guide

Commercial lawyers: what do they do?

Commercial solicitors represent companies and organisations, offering ongoing advice regarding their operational and trading needs. They support senior management teams and the board of directors in businesses by providing legal advice on matters pertaining to value protection, asset management, and commercial transactions. Throughout their careers, commercial lawyers acquire expertise particular to their industry, as well as legal and business matters, giving them a broad range of responsibilities.

A commercial lawyer may be asked to provide legal advice in the following areas: agency and distribution, franchising, marketing and sponsorship, outsourcing, advertising, negotiating custom commercial contracts and standard form documentation, and assisting with the purchasing and sales departments of a company. They are responsible for comprehending business operations and the primary motivators that apply to each unique client in their industry.

One of a commercial lawyer’s main responsibilities is to help clients with their business problems by offering workable solutions that balance risk and commercial needs while also guaranteeing legal compliance and the best possible outcome for the company. A business needs commercial agreements to be successful. A commercial lawyer must look beyond the details of the task at hand and consider the possible wider consequences of pursuing a certain transaction or course of action to provide a solution appropriate for the situation.

Within in-house legal teams, commercial solicitors offer highly customised legal services to match the demands of the employer company. Because they are inextricably linked to their company, they can offer a proactive service. They also have direct access to the decision-makers within the company and a detailed understanding of its operations and strategic goals.

In-house solicitors must also be strong and able to manage their dual responsibilities as the organization’s gatekeeper for legal matters and their primarily commercial consulting role. As readily available internal resources, in-house solicitors will participate in a wider range of business discussions and become involved in commercial negotiations early on. There is a chance to influence corporate strategy and create procedures for successfully and efficiently handling risk and legal matters.

Important subjects in commercial law

The following are the main subjects covered by commercial lawyers:

  • Contracts
  • Outsourcing
  • Franchising
  • Intellectual property
  • Agency and distribution
  • Sale and supply of goods and services
  • Advertising, marketing, and sponsorship
  • Contractual joint ventures
  • E-commerce
  • Data protection

Contracts

A legally enforceable pledge made by one party to another to do an act for that other party in exchange for compensation is called a contract. Different contractual concerns may arise depending on who is involved and what stage the negotiations are at. For instance, ensuring a legitimate contract can be enforced is one of the first things to consider when putting a contractual agreement in place.

The limitations and exclusions of responsibility are significant for companies that interact with other companies or individuals.

Rights of third parties and modifications to business conditions that may necessitate renegotiating the terms of the original contract or changing the roles of the original contracting parties are additional pertinent considerations.

The violation or prospective violation of a contract is also a crucial component. The main concern will be figuring out the innocent party’s options for remedies. A contract may also end for a variety of reasons, such as illegality, frustration, or breach.

A large portion of the work done by commercial lawyers is drafting contracts that represent their client’s business agreements. While every arrangement should be customised to the client’s unique circumstances, lawyers commonly utilise precedent clauses to help with the “building” of contracts.

This comprises of:

  • Definitions for commonly used phrases;
  • “Boilerplate” clauses found in contracts that address the legal issues that are pertinent to most transactions as well as the mechanics of how the agreement operates;
  • Business terms that, while not standard, are usually seen as necessary and offer a foundation for modification.

Although commercial lawyers handle a wide range of transactions, they all require written agreements that both parties must sign. Because of this, attorneys must understand how to execute documents related to various transactions and how a party’s identity will impact that execution. Since many of these transactions could involve parties that are not located in the same country (cross-border), commercial lawyers must be able to recognise foreign contracts and, where needed, obtain local legal counsel.

Outsourcing

An outsourcing agreement transfers the onus of providing a service to an outside party (or from one external supplier to another). Because they frequently entail the transfer of people, assets, and contracts, outsourcing agreements are more complicated than simple contracts for selling products or services. Typically lasting three to seven years, outsourcing agreements are more prolonged than ordinary service agreements.

They provide the supplier enough time to recover their initial investment, move existing services, and undergo transformation. To advise on the specialised parts of an outsourcing transaction, such as employment attorneys’ advice regarding TUPE issues and TMT lawyers’ advice regarding IT-based outsourcing arrangements, you will frequently collaborate with other departmental lawyers while providing guidance on outsourcing transactions.

Franchising

Transferring certain rights to another party in exchange for a fee is known as franchising, and it can take many different forms. The business method of franchising is an important concept to comprehend. In this method, a franchisor (A) licences a franchisee (B) to distribute A’s goods or services using A’s technology and business methods, as well as A’s trademarks. As a franchisor, A oversees that use and gives B training and other support (including publicity) so that B can manage the franchise. Thus, a franchise is a licence to employ a business strategy for a set amount of time in exchange for a royalty.

Intellectual property

IP rights can be divided into four categories: designs, patents, trademarks, and copyright. Intellectual property rights are critical to the commercial sector. Businesses must safeguard their intellectual property rights to prevent rivals from replicating their offerings. Similarly, companies must ensure that new products do not violate the intellectual property rights of third parties operating in their industry. Intellectual property rights are frequently created, owned, licenced, and transferred in commercial transactions. Moreover, the efficient identification, safeguarding, and administration of intellectual property rights can aid in optimising income prospects for a company.

Agency and distribution

Examples of marketing channels include agency and distribution, which are ways for a producer, manufacturer, or middleman – like a wholesaler – to get their goods in front of final consumers. An arrangement known as agency occurs when a principal names an agent to carry out specific tasks at its direction. Agents are frequently hired in the company to introduce and close deals with potential clients, market, and provide customer service. Unlike distribution, which involves the agent purchasing the goods, agency agreements include the agent arranging sales on behalf of the producer.

In contrast, distribution refers to a business model where a distributor purchases products from a producer and resells them under its own brand. Many of the terms that the parties cannot contractually avoid are imposed on the principal-commercial agent relationship by the Commercial Agents Regulations. Specifically, these typically grant the agent a remuneration upon the breakdown of the agency relationship. As a commercial attorney, you will be expected to prepare and negotiate the necessary agreements, offer advice on the best marketing strategy for your client, and advise on the termination process and associated costs.

Sale and supply of goods and services

A wide range of possible legal and business difficulties are covered by the sale and provision of goods and services. Dealing with a customer or another firm has a different legal framework. Therefore, it’s important to consider that when determining which laws apply.

Both common law and statutes provide the framework for the laws governing the supply and sale of products. Important laws, costs and conditions of payment, risk and title, acceptance and delivery, implicit agreements, liability limitations, and supply chain concerns are a few topics to think about.

The common law and other statutes also contain provisions pertaining to the provision of services. Different legal factors may apply depending on whether a consultant or a business render services.

Important topics include:

  • Supply chain problems.
  • Implied terms;
  • Performance and acceptance;
  • Price and payment terms;
  • Implied conditions, and
  • limitation of responsibility.

Regarding consumer rights and remedies, the Consumer Rights Act of 2015 impacts both the sale of goods and the provision of services, making it pertinent to the commercial sector.

As a commercial lawyer, you will frequently be expected to draft and uphold standard terms and conditions to minimise the quantity of custom or negotiated contracts needed for the provision of goods and the conduct of business.

Advertising, marketing, and sponsorship

In the UK, several authorities and laws oversee advertising and marketing operations. Various regulatory frameworks impact distinct forms of advertising, and several restrictions encompass both. The following areas are targeted by regulation: product type, recipient group, content, and delivery mechanism. General sales and marketing operations, direct marketing, the data privacy issues it raises, and prize and sales promotions are all covered by this area of the law.

Brands are trying harder and harder to connect themselves with content or events that consumers care about. The existence of proprietary rights in a sporting (or other) event is not recognised by English law. Thus, an event, team, or league has not officially recognised “sponsorship rights.” The sponsorship rights that brands are awarded by rights holders are not produced, exploited, or protected in and of themselves; instead, they are safeguarded by a system of laws and contracts.

The advertising sector greatly influences the economics and culture of the United Kingdom. As the most consistent growth story in the advertising industry, digital media is expected to account for most of the advertising expenditure in the UK. A sophisticated, interconnected web of software and technologies is developed to facilitate the process of delivering digital adverts to end consumers due to the fast evolution of advertising on digital and internet channels. Digital channel advertising grows in complexity and prominence as the digital economy expands.

Contractual joint ventures

Businesses can gain a great deal from collaboration (or contractual joint ventures). These can include agreements to collaborate on a particular project or to establish a longer-term partnership to introduce a new good or service to the market.

 Collaborative working is often employed by businesses to bridge gaps in technical knowledge or skills, offer a route to market by leveraging the other party’s customer base or market intelligence, or leverage developed intellectual property to avoid needless costs or delays in bringing a product to market. Customers occasionally need cooperation from one or two selected providers to deliver a customised and seamless solution.

The goal of the partnership and how it will be attained are determined by the parties in their cooperation or joint venture agreement. They determine each person’s rights and responsibilities as well as what they must provide to the relationship. They define when the partnership’s goal has been accomplished and how to end it.

E-commerce

In one way or another, most businesses will participate in e-commerce as either buyers or sellers (or both) of goods and services. Organisations have various difficulties due to e-commerce, ranging from the fundamentals of verifying that a legally binding agreement has been reached to privacy concerns and user data management.

Commercial attorneys must have a comprehensive understanding of the legal ramifications of creating and sustaining an online presence, the legal implications of conducting business electronically, and other unique challenges that the digital age brings with it. This also entails considering the difficulties involved in marketing via other remote channels, like mobile applications and emerging technologies.

Data protection

Organisations gather, process, and keep a lot of data, for internal use or as a byproduct of other activities. One important tool for businesses is data, which may provide them with a competitive edge.

However, an organisation must deal with serious risk and legal concerns while collecting, storing, and using personal data. In the context of a commercial transaction, personal data may be acquired or used. Commercial attorneys must be able to identify these situations and ensure that personal data is stored and used within an organisation or by anyone granted access in a way that complies with current data protection regulations.

The General Data Protection Regulation, Regulation (EU) 2016/679 (OJ L 119/1) (EU GDPR) for general data processing in the EU (and EEA) was replaced by the United Kingdom General Data Protection Regulation, Retained Regulation (EU) 2016/679 (UK GDPR) on December 31, 2020, at 11 p.m. UK law, creating a distinct “UK GDPR” regime.

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