In the cut and thrust of business it is often difficult to maintain an accurate record of your contractual transactions. However, it is vital to keep a precise evidence trail to ensure you are legally in the strongest position in the event of a contract or debt dispute.

Disputes can be lost or have to be conceded simply because the other party's evidence is 'better'.

Important tips include:

• Ensuring that all telephone agreements, orders or variations to the agreement are followed up in writing by letter or email.

If they are not, a note should be made of the call (even handwritten will do) recording the date and time of the call, the main points agreed or discussed, and who will do what next. There is nothing wrong with purely verbal evidence, but it is proving it in the face of a later denial that can see it worth rather less.

• Winning the 'battle of the forms'. This means ensuring that the other party's terms and conditions of trading or engagement do not 'knock out' yours:

Example: Chestnut Wholesale Limited ("Chestnut") places a written order with Acme Widget Company ("Acme") for 10,000 widgets, stating (perhaps on the reverse) that Chestnut's terms and conditions will apply to the contract. Such terms may include how any dispute will be dealt with, manner and time of payment, etc. Acme raises an order acknowledgment, and this refers to its terms and conditions (perhaps on the reverse of the order acknowledgment). Acme has a term within to the effect that Acme's terms and conditions will prevail and apply to the contract over any previous terms and conditions.

If Chestnut does not re-instate its terms and conditions by writing to that effect, Acme's terms of trading will apply. (Without such an order acknowledgment from Acme, before the parties perform their respective sides of the contract (eg pay money or supply the goods or services) the contract would have been subject to the terms and conditions of Chestnut.)

All of this detail may not seem very relevant at the time of the contract being formed. However it can become crucial later, if a dispute arises, with one party surprised to find itself bound by the perhaps less favourable, or even onerous terms of the other party.

For further information contact Barry Arkle on 0191 232 8345 or email barry.arkle@hay-kilner.co.uk

Please note: This article is not legal advice; it is intended to provide information of general interest about current legal issues. Please contact us to discuss how the contents of the article may affect you.