3rd July 2026 ❘ Legal News and Commentary

Why Every Farmer Should Read Commercial Contracts Before Signing

Agriculture has always been an industry built on trust, relationships and a good firm handshake. But while a handshake may still seal the deal in principle, it is often the written contract that determines who carries the risk when things do not go according to plan.

Let’s be honest – when you’re juggling livestock, crops, machinery breakdowns, staffing issues and trying to second-guess the weather forecast, spending your evening reading pages of legal terms is unlikely to feature high on your wish list.

However, taking a little time to understand a contract before signing it can save a great deal of expense and stress further down the line.

Beware of the Hidden Sting in the Tail

Many contracts contain obligations that may not be obvious at first glance.

One of the most important clauses to look out for is an indemnity.

An indemnity is a promise to compensate another party for certain losses they suffer. Whilst that may sound perfectly reasonable, indemnity clauses are often drafted very broadly and can leave businesses exposed to liabilities that go far beyond what they would normally be responsible for under the law.

In agricultural terms, it’s a bit like agreeing to lend someone your quad bike and later discovering you’ve also agreed to be responsible for every gate left open, every escaped sheep and possibly the neighbour’s missing prize-winning pumpkin.

That may be an exaggeration – but not by as much as you might think.

The reality is that indemnities can significantly increase your exposure to risk and should never be overlooked.

It Is Not Just About the Risks – It Is About the Protections Too

When reviewing a contract, many businesses focus on what they have to do. Equally important is understanding what protections the contract gives them.

A well-drafted limitation of liability clause can be invaluable. These clauses are designed to place sensible limits on the amount one party can recover from another if things go wrong.

Without such protection, a relatively modest contract can potentially expose a business to claims far exceeding the value of the deal itself.

Most farmers wouldn’t buy a £150,000 tractor without checking the specification, the warranty and whether the brakes work properly. Yet many businesses sign contracts worth similar sums without checking what happens if the arrangement goes wrong.

“They’re Just Our Standard Terms”

Perhaps the most dangerous phrase in commercial life is:

“Don’t worry, they’re just our standard terms and conditions.”

That may well be true.

The important question is: standard for whom?

Standard terms are usually drafted to favour the party issuing them. They may contain broad indemnities, limited rights to terminate, extensive payment obligations and minimal protections for the other side.

That does not mean they are unfair. It does mean they deserve proper scrutiny.

After all, no turkey has ever volunteered to draft the rules for Christmas.

Contracts Have Terrible Timing

One of the ironies of contracts is that they are often signed at the busiest possible time.

Whether it is harvest, lambing, drilling season or a rush to secure a supplier, there is usually pressure to get the paperwork signed and move on.

Unfortunately, contracts have an irritating habit of only becoming truly interesting after something has gone wrong.

A dispute over a failed supply, defective machinery, missed delivery or service issue can suddenly send everyone scrambling back to a contract that nobody properly read in the first place.

A ten-minute review before signing is almost always cheaper than a ten-month argument afterwards.

Don’t Be Afraid to Ask for Advice

The agricultural sector is full of experts in farming, livestock management, crop production and rural business. Few people, however, spend their days analysing indemnities, liability caps and termination provisions.

That is where taking legal advice can make all the difference.

Having a solicitor review an important contract before it is signed can identify hidden risks, explain complicated provisions in plain English and, where necessary, negotiate amendments that better protect your position.

The cost of obtaining advice is often tiny compared to the potential cost of getting the contract wrong.

As a corporate lawyer who regularly advises agricultural and rural businesses, I frequently help clients review commercial contracts and supply agreements, land-related arrangements and business transactions. In many cases, a brief conversation before signing can prevent a much more expensive conversation after a problem has arisen.

A Simple Rule of Thumb

Before signing any contract, ask yourself:

Have I actually read it?
Do I understand any indemnities contained within it?
Is there a sensible limitation of liability?
What happens if something goes wrong?
Does the contract fairly allocate risk?
Should I seek legal advice before committing?

Final Thoughts

Farming businesses face enough uncertainty from weather, markets, costs and government policy without taking unnecessary contractual risks.

A good contract should provide clarity, certainty and protection for both parties. By taking the time to understand what you are signing – particularly clauses dealing with indemnities and liability – you can avoid unpleasant surprises and protect the long-term interests of your business.

Because when it comes to contracts, the cheapest time to fix a problem is before you sign.

And unlike a broken tractor, a badly negotiated contract is much harder to repair once you’ve driven it out of the yard.

For further advice you can reach Jennifer on 01228 934409.