TRW & Co · Corporate & Commercial
Commercial Contract Solicitors in London
Commercial contract solicitors London businesses instruct draft and negotiate the agreements that decide who carries risk, how quickly you are paid and how you can exit. English law holds commercial parties to their words, so liability caps, payment terms, termination rights and dispute clauses need to be right before signature, not after a dispute starts.
Key pointOld insolvency termination clauses are often unusable: section 233B of the Insolvency Act 1986 generally stops a supplier ending supply because the customer enters an insolvency procedure, so credit risk must be managed through payment terms and security instead.
At a glance
Statutory late payment interest
Where a B2B contract has no substantial remedy, statutory interest runs at 8% above Bank of England base rate, plus fixed recovery sums of £40, £70 or £100.
Reasonableness test for caps
The Unfair Contract Terms Act 1977 subjects many exclusion and limitation clauses to a reasonableness test, and negligence causing death or injury cannot be excluded.
Penalty rule narrowed
Since Makdessi, a liquidated damages clause is unenforceable only if out of all proportion to the innocent party's legitimate interest in performance.
Limitation periods
Claims for breach of a simple contract must usually be issued within six years of breach, or twelve years where the contract is executed as a deed.
Reforms not yet enacted
Planned late payment rules, including 60-day maximum payment terms and mandatory interest, require legislation that had not been enacted at the time of writing.
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What commercial contract solicitors London businesses use actually cover
Commercial contract solicitors London companies instruct draft, review and negotiate the agreements that generate revenue and manage supply risk: supply of goods and services, distribution and agency, licensing, outsourcing, software and SaaS, framework agreements, non-disclosure agreements and standard terms of business. These documents decide who bears loss when something goes wrong, how quickly you are paid and how easily you can exit.
English law gives businesses wide freedom of contract, which is one reason it is chosen for so many international deals. The other side of that freedom is that English courts generally hold commercial parties to the words they signed. A badly drafted liability cap, a missing termination right or a vague payment clause is rarely rescued by a judge after the event.
The work of commercial contract solicitors London clients engage is preventive as much as reactive. A contract becomes a legal question well before signature. Commercial teams often agree terms by email, send purchase orders on their own conditions or start work on a "letter of intent", and each of these can create binding obligations. The safest approach is to involve lawyers when the commercial structure is set, not when the counterparty's draft lands.
The legal framework for commercial contracts in England and Wales
Most commercial contract law is common law, built by the courts. Statute then overlays it in specific areas: implied terms, controls on exclusion clauses, payment, agency, third-party rights, insolvency and execution formalities.
Formation and interpretation
A contract needs offer, acceptance, consideration, certainty of terms and an intention to create legal relations. Agreement can be reached orally, by email or by conduct. When a dispute arises, courts interpret the words used against their documentary, factual and commercial context; the Supreme Court in Arnold v Britton [2015] UKSC 36 and Wood v Capita Insurance Services [2017] UKSC 24 confirmed that clear language will be given effect even if the bargain later looks unwise.
Statutory controls
- Implied terms. The Sale of Goods Act 1979 implies terms on title, description, satisfactory quality and fitness for purpose; the Supply of Goods and Services Act 1982 implies reasonable care and skill for services.
- Exclusion clauses. The Unfair Contract Terms Act 1977 prevents a business excluding liability for death or personal injury caused by negligence, and subjects many other exclusions to a reasonableness test under section 11. Consumer contracts fall under the Consumer Rights Act 2015 instead.
- Late payment. The Late Payment of Commercial Debts (Interest) Act 1998 implies statutory interest at 8% above Bank of England base rate where the contract has no substantial remedy of its own, plus fixed recovery sums of £40, £70 or £100 depending on the debt (GOV.UK).
- Commercial agents. The Commercial Agents (Council Directive) Regulations 1993 give self-employed sales agents for goods mandatory rights, including compensation or indemnity on termination.
- Third parties. The Contracts (Rights of Third Parties) Act 1999 lets a non-party enforce a term intended to benefit it unless the contract excludes the Act.
- Insolvency. Section 233B of the Insolvency Act 1986 generally stops a supplier terminating a supply contract just because the customer enters an insolvency procedure.
- Competition law. The Competition Act 1998 prohibits anti-competitive agreements; distribution terms such as resale price maintenance and certain territorial restrictions carry real risk.
Execution and limitation
Companies execute documents under section 44 of the Companies Act 2006, and deeds must meet section 1 of the Law of Property (Miscellaneous Provisions) Act 1989. Electronic signatures are generally effective under English law, supported by section 7 of the Electronic Communications Act 2000. A claim for breach of a simple contract must normally be brought within six years, and twelve years for a deed, under the Limitation Act 1980.
Key clauses and how to approach them
Commercial contract solicitors London clients rely on spend most negotiation time on a small group of clauses that allocate risk. The table below shows what each does and where businesses go wrong.
| Clause | What it does | Common trap |
|---|---|---|
| Limitation of liability | Caps total liability and excludes categories of loss | Vague "indirect loss" wording; cap that fails the UCTA reasonableness test |
| Indemnities | Pound-for-pound reimbursement for defined losses | Uncapped indemnities that sit outside the liability cap by accident |
| Liquidated damages | Pre-agreed sum for delay or failure | Unclear trigger or a sum out of proportion to the protected interest |
| Force majeure | Suspends or excuses performance for listed events | No express clause; English law has no general force majeure doctrine |
| Termination | Rights to end the contract for breach, convenience or change of control | Relying on insolvency termination rights that statute now overrides |
| Variation | Controls how the contract can be changed | Agreeing changes informally despite a "no oral modification" clause |
| Governing law and disputes | Chooses law, courts or arbitration | Inconsistent clauses, or a forum whose judgments are hard to enforce |
Liability caps and exclusions
Caps should be clear about what they cover, whether they apply per claim or in aggregate, and which liabilities sit outside them (for example fraud, death or personal injury, confidentiality, data protection or IP indemnities). Our guide to limitation of liability clauses covers the drafting detail.
Liquidated damages and the penalty rule
In Cavendish Square Holding v Makdessi [2015] UKSC 67, the Supreme Court held that a clause is a penalty only if it imposes a detriment out of all proportion to the innocent party's legitimate interest in performance. In Triple Point Technology v PTT [2021] UKSC 29 it confirmed that delay liquidated damages normally accrue up to termination even where the work is never completed.
Variation and conduct
The Supreme Court in Rock Advertising v MWB Business Exchange Centres [2018] UKSC 24 upheld "no oral modification" clauses. If your contract requires written, signed variations, informal email agreements may not change it.
Intellectual property, data and confidentiality
Ownership of deliverables should be dealt with expressly. Under English law, copyright in work created by a contractor usually stays with the contractor unless there is a written assignment, so a customer paying for bespoke software or content needs an assignment or, at minimum, a broad licence. Where one party processes personal data for the other, Article 28 of the UK GDPR requires specific processor terms in the contract.
Confidentiality clauses should define what is protected, permitted disclosures, return or destruction of information on exit and how long the duty lasts. Commercial contract solicitors London clients bring in at the outset can align these terms with the client's insurance and data protection programme rather than bolting them on at the end.
The clause you skip because "it's standard" is usually the one that decides who pays when the relationship fails.
Standard terms, the battle of the forms and B2B terms
Many businesses trade on standard terms that nobody negotiates. When both sides send conflicting terms with quotes, purchase orders and delivery notes, English courts generally apply an offer and acceptance analysis, and the last set of terms put forward and accepted by conduct often wins. Simply printing "our terms prevail" on a purchase order is not reliable protection.
Robust business terms should be incorporated before the contract is formed, made available to the customer and accepted expressly where possible. They should cover price and payment, delivery and risk, retention of title for goods, warranties, liability, intellectual property, data protection and termination. See our article on business terms and conditions.
Where you contract with consumers, different rules apply: the Consumer Rights Act 2015 controls unfair terms and gives statutory remedies that cannot be excluded, and the Digital Markets, Competition and Consumers Act 2024 gives the Competition and Markets Authority direct fining powers. Our consumer protection solicitors advise on consumer-facing terms.
From term sheet to signature: the contracting process
- Define the commercial deal. Agree scope, price, service levels, duration and the main risk positions internally before drafting starts, so lawyers draft to a clear brief.
- Choose whose paper. Holding the first draft usually gives a negotiating advantage. Larger counterparties will insist on their own; plan a mark-up strategy and a list of red lines.
- Draft or review. Commercial contract solicitors London teams prepare the draft or a risk-rated issues list on the counterparty's draft, focusing on liability, payment, termination, IP and data.
- Negotiate. Trade points by priority, record agreed positions in the draft rather than in emails, and check that schedules, service levels and definitions match the main terms.
- Approve and execute. Confirm internal authority, the correct contracting entities and execution formalities, especially for deeds, guarantees and electronic signing.
- Manage the contract. Diary renewal and notice dates, service credit regimes and price review mechanisms, and keep a central record of variations.
Check that the counterparty named in the contract is the entity that actually holds the assets and performs the work. Contracting with a thinly capitalised group company, without a parent company guarantee, can make a strong claim worthless.
Documents and information to assemble
Before negotiation, gather the material that lets your lawyers draft accurately and spot hidden risks:
- The proposal, quote, statement of work or tender documents that describe the deal.
- Your standard terms, the counterparty's terms and any previous contracts between the parties.
- Insurance policies, so liability caps and indemnities match available cover.
- Data flow information for UK GDPR processor or controller terms.
- Details of subcontractors and suppliers, so obligations can be passed down on matching terms.
- Board or delegated authority approvals, and corporate details for each signing entity.
- For distribution and agency, the territory, exclusivity, targets and competition law constraints.
Risks and common mistakes in commercial contracts
Starting work on a letter of intent
Letters of intent let work begin before the full contract is signed, but they often leave price caps, liability and termination unresolved. If the full contract is never agreed, the parties may be left with a thin contract or none, and the supplier may only recover a reasonable sum for work done. If you must start early, use a short, binding interim agreement with a spending cap, an end date, a liability position and an obligation to continue negotiating the main contract in good faith.
Liability caps that do not survive challenge
Under the Unfair Contract Terms Act 1977, exclusions in standard terms, and many exclusions generally, must be reasonable. Courts look at bargaining strength, insurance, whether the customer could have contracted elsewhere and whether the clause was clear. An unrealistically low cap, or a clause that excludes all liability for core obligations, risks being struck down and leaving liability unlimited. Calibrate caps to contract value and insurance, and explain the rationale in negotiations so there is a record of a genuine bargain.
Automatic renewals and notice periods missed
Many service and supply contracts renew automatically unless notice is served within a narrow window, sometimes months before expiry. Missing it can lock a business into another full term at existing prices. Notice clauses also specify how notices must be given; serving by email when the contract requires post or hand delivery may be invalid. Keep a central contract register with renewal and notice dates, and follow the contractual notice mechanism exactly.
Agents treated as distributors
A self-employed agent who negotiates sales of goods on behalf of a principal is likely to be protected by the Commercial Agents Regulations 1993, with statutory minimum notice and a right to compensation or indemnity on termination that cannot be removed by contract. Businesses that label an agent a "distributor" or "consultant" do not avoid the Regulations if the substance is agency. Decide the model deliberately; our article on agency or distribution agreements explains the trade-offs.
Insolvency termination rights that no longer work
Many older contracts allow a supplier to terminate if the customer enters administration or another insolvency process. Section 233B of the Insolvency Act 1986 now generally prevents a supplier relying on such a clause, or on a pre-insolvency breach, to stop supply once the customer enters a relevant procedure, subject to exceptions. Suppliers should instead manage credit risk through payment terms, security, retention of title and monitoring, and take advice from our restructuring and insolvency lawyers when a customer is in distress.
Reforms to watch in 2026
The government has confirmed it will legislate on late payment, including maximum payment terms of 60 days with exceptions, mandatory statutory interest and a time limit for disputing invoices. These measures need primary legislation and had not been enacted at the time of writing, so current contracts should still be drafted under the 1998 Act and the existing reporting regime.
For consumer subscriptions, the Digital Markets, Competition and Consumers Act 2024 introduces a new subscription contracts regime with pre-contract information, reminder and cancellation duties; it is not yet in force, so check the commencement position before redesigning consumer journeys. For public sector work, the Procurement Act 2023 now governs new procurements; see our public procurement solicitors.
Cross-border contracts: governing law, forum and enforcement
For international deals, the governing law and dispute resolution clauses determine where you can sue and whether a win can be enforced. Since 1 July 2025 the Hague Judgments Convention 2019 has applied in the UK, helping English judgments circulate in other contracting states, including EU member states. Arbitration under the Arbitration Act 2025 remains attractive where the counterparty's assets sit in a country without reliable judgment enforcement.
Bangladesh. Bangladesh has been a party to the New York Convention since 1992, and its Arbitration Act 2001 provides for enforcement of foreign awards through the courts. Contracts with Bangladeshi suppliers or customers should therefore consider London-seated arbitration, foreign exchange approvals for payments and local registration requirements. Our guide to English law and London arbitration in Bangladesh contracts explains the drafting.
Gulf, Singapore and China. Parties often accept English law but negotiate the seat: London, Singapore and DIFC are common. Check that chosen institutions, language, and service provisions work in the counterparty's home courts. Where the counterparty is a state-owned entity, consider waivers of immunity from suit and execution.
Where goods cross borders, align Incoterms, retention of title and insurance with the governing law so that risk and title pass when the parties intend. Commercial contract solicitors London teams working with local counsel can confirm whether any terms must be registered, translated or approved locally to be effective.
How TRW & Co's commercial contract solicitors in London help
As commercial contract solicitors London businesses can call on for routine and strategic agreements, we draft, review and negotiate contracts and resolve disputes about them. Where a contract dispute needs advocacy in the higher courts, we instruct specialist counsel.
Drafting and templates
We prepare supply, services, licensing, distribution and agency agreements and standard terms, built around your risk appetite, insurance and operating model.
Contract review
We review counterparty paper and produce a risk-rated issues list with proposed amendments, so commercial teams know which points to fight and which to concede.
Negotiation support
We negotiate directly with the counterparty or support your team behind the scenes, keeping a clean audit trail of agreed positions.
Technology and outsourcing
We advise on SaaS, IT, AI and outsourcing contracts, including data protection terms, service levels and exit arrangements, with our IT and outsourcing team.
Cross-border agreements
We coordinate English law contracts with local counsel and with TRW & Co's offices in Dhaka, Singapore and Dubai, covering enforceability, tax and exchange controls.
Disputes and exit
When relationships fail, we advise on termination, notices, set-off and claims, working with our contract disputes solicitors.
Explore our practices or contact the London office to discuss a contract.
Checklist for decision-makers
- Identify the correct contracting entities and consider guarantees or security.
- Make sure your terms are incorporated before the contract is formed.
- Set a liability cap linked to contract value and insurance, with clear carve-outs.
- Check that indemnities sit inside or outside the cap deliberately.
- Include a tailored force majeure clause and a workable change control process.
- Diary renewal, notice and price review dates in a contract register.
- Agree payment terms, interest and dispute timelines in light of late payment rules.
- Choose governing law and a forum whose decisions you can enforce where the counterparty's assets are.
- Follow execution formalities, especially for deeds and electronic signing.
- Ask commercial contract solicitors London advisers to review anything unusual before signature.
Frequently asked questions
01Do I need a solicitor to review a commercial contract?
Not every contract, but any agreement that is high value, long term, exclusive, involves unusual liability or IP terms, or is on the counterparty's paper deserves review. The cost of review is usually small compared with an uncapped indemnity, an auto-renewal you cannot exit or a liability cap that fails. A good review produces a risk-rated list of issues so your commercial team can focus negotiating time where it matters. Templates prepared once by a solicitor can then be reused for routine deals.
02Are electronic signatures valid for commercial contracts in England?
Generally yes. English law accepts electronic signatures, including typed names and platform signatures, where the signatory intends to authenticate the document and any formalities in the contract or statute are met. Section 7 of the Electronic Communications Act 2000 confirms electronic signatures are admissible as evidence. Deeds need extra care because they must be signed, witnessed where required and delivered, and some registries have their own rules. Check the counterparty's authority and keep an audit trail from the signing platform.
03Can I limit my liability to the value of the contract?
Often, but the clause must be clear and, where the Unfair Contract Terms Act 1977 applies, reasonable. You cannot exclude liability for death or personal injury caused by negligence, and fraud cannot be excluded. Courts consider bargaining power, insurance, whether the customer could buy elsewhere and how the clause was presented. A cap linked to annual charges or fees paid is common, with separate higher caps or carve-outs for data protection, confidentiality and IP indemnities where the risk justifies it.
04What happens if a contract has no force majeure clause?
English law has no general doctrine of force majeure, so without an express clause a party affected by an extreme event must rely on frustration. Frustration applies only where an event makes performance impossible or radically different from what was agreed, and courts apply it narrowly; increased cost or difficulty is not enough. If frustration does apply, the contract ends automatically. Most businesses therefore include a tailored force majeure clause that lists events, requires notice and mitigation and allows termination after a prolonged period.
05How long do I have to sue for breach of contract?
Under the Limitation Act 1980, a claim for breach of a simple contract must normally be started within six years of the breach, and within twelve years if the contract was executed as a deed. Time usually runs from breach, not from when loss is discovered, although there are special rules for fraud, concealment and some latent damage claims. Contracts may also impose shorter notification periods for claims. Diary these dates and take advice early if a dispute is brewing.
06Can a supplier stop supplying if my company enters administration?
Generally not because of the insolvency alone. Section 233B of the Insolvency Act 1986 prevents suppliers of goods and services from terminating, or doing anything else, because a customer enters a relevant insolvency procedure, and it also restricts termination for some pre-insolvency breaches. The supplier can still require payment for new supplies, and there are exceptions, including for certain financial services contracts and where the court permits termination on hardship grounds. Suppliers should manage this risk through credit terms and security.
07Which law should govern a contract with an overseas counterparty?
English law is a common neutral choice because it is predictable and respects commercial bargains, but the law and the forum must be considered together. A judgment is only useful if it can be enforced where the counterparty has assets. Where that country has no reliable mechanism for enforcing English judgments, London-seated arbitration may be better, because awards can be enforced in New York Convention states. Check local mandatory rules, such as exchange controls or registration, that apply regardless of the chosen law.
Sources and official materials
- Unfair Contract Terms Act 1977, section 11 — Reasonableness test for exclusion clauses
- Late commercial payments: charging interest and debt recovery — Statutory interest, fixed sums and payment periods
- Insolvency Act 1986, section 233B — Protection of supplies of goods and services
- Cavendish Square Holding BV v Makdessi — Supreme Court on penalty clauses
- Commercial Agents (Council Directive) Regulations 1993 — Rights of self-employed commercial agents
- Electronic Communications Act 2000, section 7 — Electronic signatures
- Arbitration Act 2025 — Reforms to arbitration law in England and Wales
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.