MARITIME LAW FOCUS: Avoid giving too many rights to customers
Marine businesses risk costly mistakes by accidentally giving commercial buyers consumer-style rights, warn lawyers Jennie Harris and Lucy Goff, from Ocean Legal, in their latest column for Maritime Journal.
The marine sector is no stranger to complex contractual arrangements. Shipyards, chandlers, brokers and suppliers often straddle two worlds: they trade with other commercial operators, but may also sell directly to consumers. This dual role can create hidden legal risks.
It’s a common pitfall: shipyards, brokers and suppliers often use standard – but unnecessary – terms meant for consumers in business-to-business (B2B) contracts. This can hand commercial customers extra rights, like cooling-off periods and rights to a refund, that are not required by law and can disrupt deals and cashflow.
Why does this matter?
If a business buyer cancels under consumer-style terms, you could be left with unsellable stock or refunding deposits for bespoke work. Courts may interpret unclear contracts against you. Disputes can be expensive – even if you win.
What’s the difference?
Consumer sales (B2C): English law gives individuals strong protections such as 14-day cancellation rights, guaranteed quality and easy refunds. These rights are mandatory and can’t be excluded.
Business sales (B2B): You have much more freedom. Terms can be negotiated, and many rights can be limited or excluded. Businesses are expected to protect their own interests.
How do mistakes happen?
- · Using “off-the-shelf” terms designed for consumers.
- · Copying competitor contracts without legal review.
- · Failing to distinguish between consumer and business buyers.
How to protect your business:
- · Use separate terms for B2C and B2B sales.
- · Remove unnecessary consumer protections from B2B contracts.
- · Train your team to spot the difference between B2C and B2B sales (it’s not always as clear-cut as it might seem).
- · Get regular legal reviews of your standard terms.
In recent years we have seen businesses unwittingly paying the price for an unnecessary liability by attempting to comply with legislation – offering consumer-style protections to commercial counterparties – that they didn’t need to do.
In summary, don’t undermine your commercial certainty by over extending consumer rights to business customers. Clear, tailored contracts are your best defence against disputes and financial loss.
