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Credit risk reduction and limiting liability

If you sell your goods or services and allow the buyer time to pay you are taking a risk.  You may be able to limit this risk by:

  • the use of terms and conditions which include a retention of title clause which may enable you to recover goods not paid for
  • getting security from the customer either in the form of a charge over the customer’s property or in the form of a personal guarantee from the owners or directors of the customer.

You may also be able to limit your risk by excluding or limiting liability for the performance of your obligations under the contract with your customer.  Whether or not this can be achieved will depend on the circumstances and the extent to which any limitation or exclusion can be said to be reasonable. 

We can help in preparing appropriate documents to help limit the risks to which your business can be exposed by these often avoidable problems.

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