legal business health check

Why every business should have a legal health check

As a business expands, its obligations and priorities evolve. Conducting a legal business health check can reveal irregularities in dealings and agreements with third parties.

When starting up or managing an established business, it is crucial to have the necessary elements in place for both efficiency and legal compliance. Overlooking fundamental legal considerations can lead to costly mistakes in case of breakdowns in third-party or employee relationships.

Terms and Conditions

The foundation of operating a business lies in its terms and conditions. Key considerations include:

  • Ensuring that terms and conditions align with the products and services offered, and reevaluating them as the business grows.
  • Assessing if existing terms and conditions provide adequate protection in case of issues.
  • Verifying compliance with consumer legislation for contracts with consumers.

If any aspects of the terms and conditions require updating, seeking professional advice ensures alignment with the current business structure.

Service Level Agreements

Whether providing a product or service, the service agreement defines the relationship between the business and the customer, preventing misunderstandings and offering mutual protection. When drafting or reviewing business service agreements:

  • Assess if agreements provide sufficient protection and limit liability.
  • Ensure accurate drafting with all necessary provisions included.
  • Evaluate the realism of the products or service levels offered.

Data Protection and Intellectual Property

Intangible intellectual property, such as copyrights, patents, trademarks, and data, must be protected from unauthorized use. Consider:

  • Registering trademarks.
  • Clearly outlining ownership of intellectual property in agreements with third parties.
  • Ensuring compliance with Data Protection legislation.


A legal health check should confirm that employment contracts encompass everything necessary for the business’s protection, including:

  • Disciplinary and grievance policies and procedures.
  • Confidentiality agreements.
  • Restrictive covenants.

Simultaneously, the check ensures compliance with legislation and assesses if key personnel are appropriately restricted to safeguard the business. An employee handbook should encompass policies related to discrimination, harassment, health and safety, overtime, pay, equal opportunities, complaints, sickness, and drug and alcohol issues.

In Conclusion

A legal business health check covers a broad spectrum of issues and should be looked over on a regular basis to ensure no issues that may arise have been overlooked and cause more of an issue than would have been necessary.

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