When customers don’t pay, UKWA Conditions of Contract can protect you, says legal advisor

October 21, 2021

In the latest of UKWA’s Bitesize Briefings, Nick Clarke, Senior Partner and Head of Dispute Resolution & Insolvency at legal specialists Aaron & Partners, highlighted the importance of UKWA’s Conditions of Contract in protecting warehouse keepers in the event of a customer either going bust or not paying their bill.

Explaining the legal position with Liens – the right to retain goods until sums due are paid – Nick underlined that although UKWA Conditions of Contract has provision for Liens, it is vital that members incorporate the Conditions into their contracts with customers – and ensure customers are fully aware of the clause covering the Lien.

“Some members just tend to add a reference to UKWA Conditions of Contract to their invoices, but this is not sufficient to protect them in the event of needing to rely on the terms,” he said. “My recommendation would be to include the conditions in the initial quote to the customer, display them clearly on the website, and include them in all paperwork before the work starts, not after the service has already been delivered!”

Nick went on to examine the more complex position where goods do not directly belong to the customer, such as in the case of a freight forwarder or shipper where storage has been subcontracted and explained the different impact of a customer going into liquidation rather than administration.

“The Liens incorporated into UKWA Conditions of Contract affords robust protection– and allows for members to sell goods if customers don’t pay. However, there can be complications and pitfalls,” Nick concluded. “So while UKWA Conditions are a real asset, my advice would be to take advantage of UKWA helpline as soon as such a situation arises. Aaron’s have huge experience around these matters and our legal helpline is another great benefit of UKWA membership!”