Whatever the nature and size of your business, make sure you have effective terms and conditions (T&Cs) governing your activities. This can nip potential problems in the bud before they start to escalate.
A good set of terms and conditions also lays a solid foundation for a great relationship with your customers and suppliers.
When you sell or buy a product or service, basic contract law applies. This is the case whether or not there are T&Cs in place.
However, you will reap significant benefits from having a standard set of T&Cs as they can only enhance your legal rights. Crucially, they will also give you additional protection should things go wrong.
What are TTerms and Conditions?
Put simply, your business T&Cs are the terms you decide should be put in place to control your business relationships with customers and clients and any suppliers. A typical set of T&Cs may include:
- Relevant time limits for delivery and payment
- The length of, and limits to any guarantee
- Who pays your legal costs if a dispute arises
- Retention of title of unpaid goods
- How a dispute should be resolved
- The right to delay delivery where circumstances are beyond your control
- Limiting or excluding liability if the other side does not fulfil their responsibilities (often called ‘disclaimers’)
- Termination of the contract provisions
- Terms protecting your intellectual property
Before entering into a transaction, you would usually need to send these T&Cs to the buyer or client so that they know and understand what standard terms apply before you finalise the sale.
Most businesses have a website, in which case you can simply signpost the customer to your T&Cs on the website and ask that they indicate they have read them before placing their order. These terms then form part of the final contract and both sides will be bound by them.
So, once you have both entered into the transaction, the contract between you will be regulated by contract law, together with your terms and conditions of business.
How do we decide what to include?
This depends on the nature of your business. You need to carefully consider what terms you would like to include that will effectively protect your interests, while taking into account any relevant regulatory requirements you must abide by.
There are limits to what you are legally allowed to include in your contract and T&Cs, so a little
caution may need to be exercised.
You can’t, for instance, limit or exclude your liability for personal injury resulting from negligence; and any attempt to limit your liability for misrepresentation could well be treated as unfair and will be unenforceable.
You have probably come across various standard T&C templates online, but please take care with these – it’s always best to have your own drawn up. This is because standard templates could include terms that may disadvantage you and your business in some way; or may not include terms that you ideally ought to have in place to protect you.
For these reasons, most businesses would be wise to take specialist legal advice to ensure they have robust terms and conditions that protect them.
What should we do now?
Carefully consider what T&Cs you need to benefit and protect your business. Think about your exposure and where the greatest risks lie in your daily commercial activities.
You can then decide on the business terms and conditions you need to protect your business – while providing excellent customer service to the other party.
The above is intended as guidance only and does not substitute legal advice. Please browse our existing Agreements and Contracts services or get in touch with LegalDrop via our contact page if you need assistance.