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Supply of services for park businesses – 7 essential legal tips

What do you need to consider as a park owner when procuring services? Our Parks team looks at how the supply of services differs from the supply of goods, with practical tips to help you avoid common problems and protect your business.  

 

Buying services or goods is a normal part of doing business as a park owner, whether you are passing these on to your customers or require them for the smooth running of your business. These purchases can be significant, however, making it essential to be aware of your rights and obligations when entering into any contract, including a supply of services agreement.

In particular, business to business (B2B) sales and consumer sales are not the same in the eyes of the law, while there are also some key differences when it comes to the supply of B2B services vs buying B2B goods.

Does it matter whether you’re buying services or goods?

It's not always obvious whether a park owner is buying services or goods as the legislation offers no clear-cut definition for services. This means the distinction between the two can depend on a number of factors.

For example, a park owner who buys a new caravan built to a standard specification is likely to be purchasing goods, whereas a park owner who engages a contractor to deliver the caravan to their park is purchasing a service.

The question of whether goods or services have been supplied becomes most relevant if there’s a problem with a product provided as part of the contract, as your legal position may depend on the answer. Courts look for the ‘“substance’” of the contract, asking which element is the more important.

With no precise definitions of what constitutes a service, it’s essential to consider your supply of service contracts carefully, as your position in a dispute may depend on the interpretation of this.

The main legal considerations for B2B supply of services

While the distinction between B2B goods and services can be significant when dealing with disputes, there is some overlap when considering the practicalities of buying goods as a business and buying B2B services. The key tips to bear in mind are broadly the same for both.

  1. Pay attention to terms and conditions

Check the standard terms and conditions carefully. These set out the supply of service agreement between you and the seller and must have been made available before the purchase through sales material and/or quotation and order forms. However, once the service has been ordered, any opportunity to renegotiate other terms has been lost.

  1. Get promises in writing!

You may be able to enforce other promises made by the supplier. For example, a statement in sales literature or by one of the sales team is quite likely to take effect as an additional contract term or as a representation. But you need to be able to prove the promise was made and that it was intended to be relied upon. It’s likely that written confirmation in an email or letter from one of the supplier’s directors or another senior employee will address this.

  1. Remember the implied terms

B2B standard terms and conditions may not include all of your legal rights. There are implied terms within the Supply of Goods and Services Act 1982, which can provide some protection as a business buyer. The implied terms are similar for both B2B and consumers, so may be useful for services that a park owner bought B2B and then sold B2C, as it means the B2B supplier may be liable for any problems. There are exceptions to this, however, as some implied terms can be excluded – see the next tip!

  1. Check for excluded or restricted liability

Keep an eye out for exclusion clauses in the supply of services contract: these may state specifically that a particular implied term is to be excluded or modified. There is a much greater scope to do this in a B2B contract than in a B2C contract, as long as this can be considered reasonable. Targeted limitations which do not try to exclude an implied term in its entirety are more likely to be reasonable, for example if one aspect of these services is particularly complex.

It may also be reasonable to exclude or limit liability for the financial consequences to an end-user consumer if these relate to the consumer's particular circumstances and were not foreseeable to the supplier.

On the other hand, it's unlikely to be reasonable for the supplier to amend the implied terms so there is no obligation to provide the service at all or the time frame can be extended indefinitely. And a B2B supplier may never exclude liability for causing personal injury or death through their negligence or through supplying unsafe consumer goods, or for fraudulent misrepresentation.

  1. Be aware of price variations

In some situations, B2B supply of services contracts will include a price variation clause alongside the agreed price. This is more likely to be found in long-term contracts, which should always be individually negotiated. In exceptional cases, a B2B contract may not actually include the price. In this situation, the Supply of Goods 1982 Act implies a term that the buyer will pay a reasonable price.

  1. Confirm insurance arrangements

Check these are clear and reflect what has been agreed. Consider who is responsible for the provision of the services and any problems with these, particularly if you are selling the services onto your customers.

  1. Take advice when switching long-term contracts

You may wish to appoint a new supplier or bring a service in-house. If this means ending a long-term supply of service contract, your supplier’s employees may have valuable legal rights under TUPE (the Transfer of Undertaking (Protection of Employment) Regulations 2006). In some cases, this can lead to a claim against you as the park owner, so you should seek advice from an employment law specialist to check your position.

What should you do next?

It's always advisable to speak to your solicitor for information on specific B2B agreements, particularly for more valuable contracts.

How can Tozers help?

Our dedicated Parks team is on hand if you need advice on negotiating and agreeing terms for supply of services contracts or require support in resolving a dispute. Contact us for further support and bespoke guidance on your situation.

Our specialist Parks team truly understands the world you operate in, having been at the cutting edge of park law for over 65 years. We offer industry-specific guidance across all areas of your business – helping you stay ahead of problems, deal with day-to-day issues and make the most of commercial opportunities.