Start your own company

When you’re in the midst of discussing a potential deal, whether it’s engaging a contractor, hashing out a services agreement, or contemplating a business sale or purchase, it’s crucial to tread carefully in your email communications. The last thing you want is for your preliminary discussions to be misconstrued as a legally binding agreement.

As an Australian commercial law firm, we’ve unfortunately seen some of the consequences of legally-binding emails. Here are some straightforward tips to help keep your emails clearly in the realm of negotiation, not commitment.

Tips to keep emails non-binding

1. Choose Your Words Wisely

Be explicit in stating that your emails are part of ongoing negotiations and not final offers. Phrases like “subject to contract” or “non-binding” can serve as clear indicators that you’re still in the discussion phase. This simple step can prevent a lot of misunderstandings down the line.

2. Speak Conditionally

Frame your discussions with conditional language. Terms like “should we proceed,” “potential agreement,” or “contingent upon” signal that you’re considering options, not making firm commitments.

3. Include a Disclaimer

A straightforward disclaimer at the beginning or end of your emails can make your intentions clear. Something along the lines of “This email is for discussion purposes only and does not constitute a formal offer or acceptance” can go a long way in setting the right tone.

4. Mention Formal Agreements

Make it clear that any final agreement will be subject to a formal, written contract. This underscores that the email chain is part of the preparatory work and not the final deal itself.

5. Avoid Definitive Statements

Stay away from language that suggests a deal has been finalized. Words like “we agree” or “this confirms” can imply a level of commitment you may not be ready to make.

6. Keep Details Provisional

While some level of detail is necessary for meaningful discussions, be cautious with how much you divulge. Make it clear that any terms or conditions mentioned are provisional and subject to change.

7. Seek Acknowledgement

Consider asking the recipient to confirm their understanding that the discussions are preliminary. This can provide additional clarity and reduce the risk of misunderstandings.

8. Consult a Professional

When in doubt, it’s always wise to seek legal advice. A brief consultation with a legal expert can ensure your email communications are crafted to avoid unintentional commitments, particularly in significant deals.

By following these simple guidelines, you can navigate the delicate phase of preliminary negotiations with confidence, ensuring that your email communications foster discussion without inadvertently binding you to a deal before you’re ready. Remember, clarity is key in communication, especially when potential legal agreements are on the line.

 

Contact Rise Legal today for a free obligation call on your business legal needs and gain peace of mind in your business.

Disclaimer: This blog post is intended for informational purposes only and should not be considered legal advice. Consult with a qualified commercial lawyer for personalised advice related to your specific circumstances.

 

Share this article using the links below:

Helen Kay - Managing Director

Helen Kay

If you require any assistance with your business legals or any other commercial legal issue, please do not hesitate to contact me.

Typical Legal Disclaimer!…

Unfortunately, there is never a ‘one size fits all’ formula to apply. Every situation is unique and it can be tricky to wrap your head around some areas of the law. To ensure you are setting yourself and your business up for success, it is always best to consult a legal professional with expertise in the field.

Related Posts

What Exactly Does Pty Ltd Mean in Australia?

What Exactly Does Pty Ltd Mean in Australia?

As a commercial law firm, one common question we see raised regularly is, "What exactly does Pty Ltd mean in Australia?" Understanding this concept is crucial for anyone looking to venture into the business world in Australia. In this blog, we'll break down the...

read more
Three Stages To Selling a Business

Three Stages To Selling a Business

Business Owners Should Always Be Ready To Sell Their Business   Whether you're considering selling your business in the near future or not, having it ready for sale should be a thought that lingers at the back of your mind throughout its entire lifecycle....

read more
Essential Legal Documents for Allied Health Businesses

Essential Legal Documents for Allied Health Businesses

Starting and running an allied health business can be an incredibly rewarding endeavour, but it's essential to ensure that you have the necessary legal safeguards in place to protect your practice and your clients. In this article, we'll discuss some of the essential...

read more