Contracts are a big part of business. They protect the interests of parties engaging in commercial relations. Having that legal certainty in your affairs can provide you with the stability you need to conduct your business. Given the many types of business relationships that may form, there are varied types of contracts that coincide with this. One of these types of contracts is a period trade contract, or simply a period contract.
A period trade contract is a contract template that sets out the terms for a business relationship where the contractor is engaged to perform work from time to time. Rather than engaging in an all new contractual agreement each and every time two parties engage in commercial relations, a period trade contract template can be executed and added to the overall preexisting contractor agreement. This works especially well in the building industry when the conditions of work are much the same each time, but the engagement of work is dependent upon other things finishing. This way, you can just do a period trade contract every time you need the services of a building contractor. Each time, that template is signed, agreed to, and then added to the existing overall contract. The Australian Government Business website provides guidelines on these contracts.
Benefits
There are a number of benefits to these types of contracts. These are as follows:
- They allow great flexibility for work that is staggered or intermittent
- If you are a sole trader and are time poor, you can save precious time in the negotiation of terms process if there are continuously implicit agreements already in place
- You can save money by using templates that are added as addendum to an overall agreement. Rather than having to seek legal services each and every time you engage in work
- It can help create good long term working relationships based on a lot of good faith and trust
Things to be mindful of
As with any legal document, there are a number of things to be vigilant for when utilising a period trade contract. These are as follows:
- Sometimes the contract template may vary to the original. As with any contract, clauses and terms never exist in a vacuum. They influence and impact on one another
- Jobs may be unique enough that they require new agreements entirely. It is important not to rely solely on templates if the nature of work can vary
- It can be easy for either party to get complacent and miss details if relying solely on period trade contract templates all of the time. Sometimes there is some utility in keeping each job and agreement separate, even if it is based on a continuous working relationship
Ultimately, each situation is different. Whilst a period trade contract may seem suitable, it may not always apply. It is sensible to scrutinise each business transaction you make on its own merit. Accordingly, if you are unsure about your situation, it may be worth seeking the advice of a contract lawyer.
