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In the world of service and work providers, drawing up a robust contract is essential to ensure that your rights are protected. This subject concerns providers of services and work carried out in United Kingdom or offered to clients in United Kingdom, and covers the following rules: 

Any website owner offering online services in UK, also because the rules on data protection are in addition, and are strictly regulated, all to be regulated in the General Terms and Conditions of Sale (GTCS). 

What is a service contract and what types are there? 

Service contracts vary according to the following: 

It should be noted that acceptance of the general terms and conditions of sale (GTCS) online is legally equivalent to a contract, although it is not “in writing” as such.  

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What are the main mistakes service providers can make and how can they avoid them with AdminTech? 

To avoid common mistakes when drawing up a service contract, it is important to pay attention to the following key points:  

To avoid these mistakes, use the AdminTech online contract builder to create a robust works or project contract. 

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In United Kingdom, the subject of liability for defects, fault or negligence mainly concerns service and works providers, taking into account all of the following points: 

  1. Service contracts may sometimes involve a transfer or modification of ownership, giving rise to strict liability for defects without fault being required. 
  2. The performance of services often involves a number of subcontractors, whose misconduct may make you personally liable. 
  3. Case law on the limitation or reduction of liability by contractual clauses is fairly restrictive. 
  4. In addition to the responsibilities of the service provider, the customer or his agents may also make a mistake that affects the outcome of your work. 
  5. Clarity in a contract is the key to success in order to avoid any complaints about the quality of services. 

In addition, any website owner offering online services in UK should be aware that system malfunctions, loss of data by the site host or cyber-attacks can cause significant damage to your customers and engage your liability. 

With regard to the legal rules governing the provider’s liability for defects, fault or negligence, here are the main points to note: 

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It should be noted that where the subcontractor does not perform only part of the service or only a subordinate task, but fully replaces the service provider, the latter is only liable for the care with which it chose and instructed the subcontractor. On the other hand, the substitute may be acted upon directly by the customer, subject to certain limits – the only exception in UK law in this area being that the substitute is not itself bound by the contract to the customer. 

Recommendations

To limit liability in contracts of enterprise, we recommend that you consider the following tips: 

  1. In contracts for work and services, remember to clearly delimit the moment of transfer of risk using our contract templates, and the service provider will no longer be liable for damage or defects after this moment. 
  2. As a subcontractor, be careful if you accept payment or instructions directly from your principal’s customer, as this may imply a tacit contract with him, whereas all the limitations of liability that you have agreed with your direct principal will no longer be enforceable against this customer who has not signed up to them. 
  3. Always remember to limit your liability to the amount of fees paid during a certain period prior to the dispute. 
  4. Even if you are contractually authorised to do so, always ask your customer for firm acceptance if you hire external subcontractors. 
  5. Include a clause in the contract specifying the time limit after completion for reporting any defects in the service. If the customer accepts unreservedly that there is no defect, you can no longer be held liable. 

Incoterms in sales contracts 

Incoterms (or International Commercial Terms) are a set of three-letter terms that are used in international commerce as definitions of the responsibilities of both parties during the delivery of goods. These terms seem to serve as a common language that provides clarity between buyers and sellers from different countries.  

The seven Incoterms 2020 rules for any mode(s) of transport are: 

EXW – Ex Works 

This Incoterm means the seller’s responsibility is only to pack the goods and make them available for the buyer. At the same time, costs and risks associated with transporting the goods are up to the buyer.  

FCA – Free Carrier 

The term under which the seller fulfills the responsibility of making the goods available for delivery to the agreed place (or person) whether it is the buyer’s means of transport or carrier. According to the risks, once the goods are available for pick-up, all threats are upon the buyer.  

CPT – Carriage Paid To 

Under this circumstance, the seller is responsible for delivering the goods to the carrier, another person, or a defined place. The seller is in charge of export clearance and arranging transportation to the agreed point. After handling the product over to the carrier, the duty is on the seller.  

CIP – Carriage and Insurance Paid To 

This Incoterm has a somewhat similar definition to CPT as the seller is also obligated to deliver the goods to the carrier, another person, or a defined place. However, the additional point here is that the trader is responsible for obtaining insurance against the buyer’s risk of loss or damage during transportation. 

DAP – Delivered At Place 

In the situation of DAP, the ordered products are considered to be delivered once they have reached the final destination where the buyer should get the parcel. Until this time, the seller is responsible for any damage that may happen.  

DPU – Delivered at Place Unloaded 

Under this rule, the seller is liable for any threats that may happen not only during the process of transferring the products but also at the time of unloading. So, in case of damage, it’s up to the seller to cover the expenses.  

DDP – Delivered Duty Paid 

This term means that the seller is responsible for all transferring costs as well as for export clearance. According to the receiver, he or she should get the parcel, and pay for insurance, as well as for any defects during the unload.  

Can the parties use Incoterms 2010, instead of the renewed versions? 

Yes, Incoterms 2010 can be used during the cooperation. However, to avoid any kind of confusion, all parties have to agree to use the same rules.  

To prevent issues, parties should have a mutual understanding of the outlined terms and conditions. In case of any kind of uncertainty, it’s advisable to seek legal advice or consider updating the contract to align with a common set of Incoterms. 

Our sales agreement templates digest the rights and obligations under said Incoterms in comprehensive language. 

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Sellers of goods, whether professional or private, who sell products to consumers in United Kingdom are directly affected by consumer rights, the key points of which are as follows: 

  1. Consumers are protected not only by the justice system, but also by consumer protection associations. 
  2. Non-professional consumers have difficulty interpreting ambiguous restrictive clauses, and so often do not consent to them validly, rendering them null and void. 
  3. Consumers have more rights than professional buyers, and your duty to inform them is more extensive. 
  4. Consumers are in principle protected by more favourable rules in their country of domicile, unless they go abroad to buy, and therefore international sales may involve more extensive rights than in UK. 

Main legal rules 

Now that we’ve established the general framework, it’s time to look at the main legal rules that apply to consumer rights in UK. 

However, the right of withdrawal is excluded in the following cases: 

  1. Goods made to order or clearly personalised, the manufacture of which requires special adaptations to meet very precise technical and aesthetic requirements. The choice of options (e.g. colour, finish) in standard ranges does not change the nature or purpose of the goods sufficiently to make them clearly personal. 
  2. Goods that have deteriorated or are rapidly perishable, except food products with a minimum durability date. 
  3. Goods that have been opened by the buyer and cannot be returned for reasons of hygiene or health protection (e.g. sealed cosmetics, underwear sold in sealed bags). 
  4. Goods that cannot be separated from other items (e.g. remote control for a television set). 
  5. Digital content supplied on an intangible medium. 
  6. CDs, DVDs or computer software opened by the buyer. 
  7. Newspapers, periodicals or magazines, except in the case of a subscription contract. 

Recommendations

Now that we’ve looked at the main consumer rights and legal rules, here are some recommendations for sellers of goods: 

  1. Please clearly state whether you intend to sell only to professionals or also to consumers. Different rules must be followed and applied. Our templates allow you to deal separately with the rights of consumers and those of professional buyers.  
  2. Clearly assess whether or not you wish to offer online products to consumers in other countries. If so, we recommend that you create another web domain with general terms and conditions tailored to those countries. 
  3. Don’t forget to include the necessary details about the merchant and the products on the website. Pay particular attention to prices and charges or taxes. 
  4. Make sure that the buttons on the website are clear and unambiguous, and that you clearly state the summary of the order before confirming it. 

To protect yourself against consumer complaints, you can use our model sales contracts. 

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Almost all employees classed as workers are legally entitled to a minimum paid holiday a year which is also known as statutory leave entitlement or annual leave. This is a paid period off work that employees can use whatever they like with no loss in their salary. It applies to: 

How Is Paid Holiday Calculated? 

The annual leave is usually limited to 28 days for those, who work full-time 5-6 days a week. 
 
The duration for part-time employees can be calculated by the next formula: 

The number of their average weekly working days × 5.6. 

According to those, who work irregular hours, their holiday entitlement is calculated by the amount of hours they’ve worked in the previous 52 weeks × 12,07%. The result will be equal to the hours these people can take off. 

Holiday Pay 

The holiday pay is estimated according to the usual hours someone works. 

Payment in Lieu of Holidays 

Payment in lieu of holidays is not allowed, except for the termination of the agreement when the employee could not have taken all the holiday entitlement. 

Workers on Parental or Sick Leave 

Holiday entitlement builds up during certain types of leave, including maternity, paternity, adoption, or sick leave. 

Booking Time Off 

Before taking time off the employee has to inform the employer about that. Here it’s better to keep in mind that the sooner the worker tells about the leave, the better. The notice should be no less than twice as long as the amount of days off the employee wants to take, plus one day. So, for example, if the person wants to take 5 days off, he or she should inform the employer in 11-day time.  

It’s also vital to remember, that the employer has the right to refuse the request and notify the employee about their decision no less than the amount of days off the employee wants to take, plus one day. So, if the employer doesn’t agree to give the leave for 5 days, the employee has to be notified about that 6 days before or earlier. 

When Leave Can and Can’t Be Taken 

There are such periods, when employees aren’t allowed to take paid leave. These situations are usually specified in the employment contracts and are referred to as busy periods that vary depending on the industry. There might also be cases when employers notify their employees of the days when it’s better to take a paid holiday or even require them to use their leave within a certain timeframe or lose it. 

Bank Holidays 

Bank holidays do not have to be given as paid leave. An employer can choose to include bank holidays as part of a worker’s statutory annual leave. 

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Employers should be aware of and adhere to the legal requirements that are mentioned above. To avoid legal consequences and ensure fair treatment, AdminTech suggests:  

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Each employer has to adhere to the regulations according to the minimum wage. This amount is set by the government to make sure that workers can receive enough money to cover their basic needs. Any social security contributions and taxes payable by the employer apply to the minimum wage and not to the lower actual wage. The minimum wage is often changed from one year to the next, requiring regular employment contracts to be adapted. 

National Minimum Wage in the UK  

The employee needs to be at least of a school leaving age to qualify for the National Minimum Wage (NMW). The rate is divided into different age brackets, with lower rates for younger workers. The NMW applies to most workers, including those who work full-time and part-time. 

National Living Wage in the UK 

Workers aged 23 and over are entitled to a higher minimum wage rate which is also called the National Living Wage (NLW).  

Apprentices 

Apprentices are entitled to the reduced apprentice rate if they’re either aged under 19 or for the first year of their apprenticeship, but in no case if they are of at least of the qualifying age for the NLW as indicated above. 

NMW and NLW Don’t Apply to 

There are certain categories of people that aren’t entitled to get NMW or NLW. These include: 

Current Rates 

As for today, the wage looks the following way.  

23 and over 21 to 22 18 to 20 Under 18 Apprentice 
£10.42 £10.18 £7.49 £5.28 £5.28 

However, the rate changes every year, and from 1 April 2024, the amounts will be slightly different. 

21 and over 18 to 20 Under 18 Apprentice 
£11.44 £8.60 £6.40 £6.40 

Amounts taken into account for calculating the minimum wage include: 

Amounts not included in the calculation of the minimum wage: 

AdminTech Recommends

Employers in the UK who fail to pay the minimum wage may face legal penalties. To avoid this, AdminTech suggests: 

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You can always modify your employment contract and the wage that is included there using valid document templates. Just fill in the needed information, save it, and come to your employment contract whenever you want to edit any detail.  

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