Why are written documents better and why should you ensure all of these are kept up-to-date?

With any new customer or any ongoing customer relationship, there is one critical factor that you must get right first time, every time.

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Why are written documents better and why should you ensure all of these are kept up-to-date?

With any new customer, or any ongoing customer relationship, there is one critical factor that you must get right first time, every time. That is having a signed contract or credit application form. Whilst it is possible to make a verbal agreement, a written contract is always preferable and is infinitely easier to rely on in Court, should this become necessary.

Why are written documents better and why should you ensure all of these are kept up-to-date?

  1. It maximises your chances of recovery. Simply put, if your customer does not sign any formal document then what is there to say certain conditions were agreed? It would boil down to a ‘he said, she said’ situation and, in Court, this increases the chances that a Judgment will go against you if the Judge prefers the version of events put forward by your opponent. It is incredibly easy and common for unscrupulous debtors to say they did not agree to either your terms and conditions as a whole or a certain condition on which you are looking to rely.
  2. It allows you to know who your customer is. For example, we often see issues whereby a customer has signed a contract in their own name yet they are running a business. The first question here is, is it a sole trader, a partnership or a limited company? These small differences are critical to ascertaining the correct entity to sue and without a clear record of who you have contracted with, it is a huge gamble to proceed with any formal action.
  3. It also makes it easier to monitor the customer and their ability to pay you during the course of your relationship with them. If you take a customer on who pays you on time and in full every time that is great, but things can quickly change, and monitoring this is vital. If your customer is a limited company, which you would know from the contract or credit application form, then it is really easy to monitor these on Companies House or via a credit agency to make sure you are aware of any changes as soon as they happen, allowing you to take the necessary action to protect your position.

The first rule of any business relationship should always be to ensure your customer signs a contract incorporating all the terms applicable to the deal or a credit application form which also incorporates your standard terms and conditions.

For any advice on this or any other matters please contact us at debtrecovery@keebles.com

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